CHINESE AND INDIAN FOREIGN DIRECT INVESTMENT’S EFFECT ON AFRICAN GROWTH

Open Access
Author:
Bat Yeruult, Odgerel
Area of Honors:
International Politics
Degree:
Bachelor of Arts
Document Type:
Thesis
Thesis Supervisors:
  • Subhanan Mukherjee, Thesis Supervisor
  • Gretchen G Casper, Honors Advisor
Keywords:
  • FDI
  • China
  • India
  • Africa
  • Economic Growth
Abstract:
This study analyzes the impact of Chinese and Indian foreign direct investment (FDI) from 2003-2012 in the economic growth of African countries. The results show that Chinese FDI is positive and significantly correlated with economic growth in Africa, but Indian FDI has an insignificant relationship. The positive and significant relationship of Chinese FDI stock as a percentage of GDP with per capita income growth implies that a consistent increase in Chinese FDI into African countries can leader to higher growth in the population. As the literature implies, FDI leads to technological transfers that could then lead to growth, which attracts further investments that further leads to increased transfers and continual absorptive capacities.