What’s the Impact of Chinese Outward Direct Investment on African Countries’ Export Upgrading
The debates on trade and economic growth have increasingly put emphasis on export composition. For developing countries, exports of more sophisticated and diversified products appear to be positively correlated with growth. Recent studies show evidences implying that attracting Foreign Direct Investment (FDI) ignites the potential for export transformation in emerging market and developing countries. In recent decades, China has been a major investor in Africa. However, the impact of Chinese outward direct investment (ODI) on recipient African countries’ exports upgrading remains unclear. I hypothesize that Chinese ODI has a positive impact on African countries’ export quality and diversification. My research contributes to the existing literature by looking at Chinese ODI’s impact on 54 African countries’ export upgrading during 2003 and 2016. Using data from COMMOF, UNCTAD, and a General method of moments (GMM) model, I find that a one-year lagged Chinese ODI inflow has had a positive and significant impact on African host economies’ export quality through capability spillovers but no significant effect on export diversification. These results imply that, in recent years, Chinese ODI has been effective in promoting African countries’ export transformation through increasing the share of manufacturing exports and reducing the focus on natural resource exports. These results suggest that African policy makers should seek to attract Chinese ODI that results in technology and knowledge transfers, and also seek more diversified investments in future cooperation with China.
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China's growing outward direct investment in Southeast Asia: a quantitative analysis of the political impact LI, XIANG (Georgetown University, 2016)To capture the political impacts of China’s outward direct investment (ODI) in Southeast Asia, this study investigated the relationship between China’s ODI amounts in 10 Southeast Asian countries and their voting behaviors ...