The dynamics of chinese foreign direct investment: assessing its impact on gdp in african countries

Details

Supervisors

Parienté, William

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

This thesis seeks to elucidate the impact of China's FDI on the GDP growth rate of African economies, thereby addressing the pivotal role of investment in fostering economic progress. With the African continent as the contextual backdrop, this study meticulously selects China's FDI, GDP growth rates and a number of relevant control variables in African countries over the years 2005 to 2021. Notable control variables include overarching determinants such as total foreign investment, inflation dynamics and trade volume, among others. The methodology relies on the Fixed Effects (FE) regression models with panel data for variable estimation. Through this methodological lens, the study seeks to unravel the complex interplay that underlies the intricate relationship between Chinese FDI and annual GDP growth in the African economies under study. The initial findings of the empirical analysis bring to the fore a startling observation: the expected direct link between the level of Chinese FDI and the annual GDP growth rate in the African countries under study does not appear to have been established. The complex underpinnings of this multifaceted relationship invite a deeper investigation to unearth the multiple rationales that may be contributing to this observed disconnect. At the same time, this research drives an exploration of conceivable future trajectories within investment paradigms, offering both a retrospective analysis of underlying determinants and a proactive projection of potential investment dynamics.