The_Economic_Determnants_of_Chinese_FDI_to_Africa英语论文.docxVIP

PAGE  PAGE 11 The Economic Determinants of Chinese FDI to Africa Name: Tianwen Huan Department: Economic Development and Policies Kobe UniversitySummary Foreign direct investment (FDI) has become an increasingly popular topic in recent decades and China, as a new major ‘emerging’ investor, has drawn more and more attention among world economies. As Chinese foreign direct investment has played a very important role in economic activities in Africa, this paper empirically analyzes the economic determinants of Chinese FDI to 37 African countries from 2003 to 2012. This paper first measures exchange rate volatility using the GARCH (1,1) model. Then, all the variables presented in current US$ were adjusted by using the US GDP deflator in units of one million dollars. As the argument about the unit root test for panel data, two interpretative models are used in the final calculation to analyze the relationship between variables and Chinese FDI to Africa. The results, which illustrate how Chinese FDI to Africa is driven by characteristics of the host countries, can be summarized as follows: First, GDP can be seen as one of the most important considerations to attract Chinese FDI to Africa, which means African countries with a larger market size normally receive more Chinese FDI. In addition, Chinese investment to Africa is empirically generated as a supplementary part to Chinese exports to Africa. Interestingly, if the amount of imports from China to a single country grows too quickly, Chinese OFDI decreases to that country. Second, another determinant of Chinese OFDI to Africa can be explained by the phenomena of resource seeking. In this paper, fuel exports are used as a proxy for resource seeking. The result shows that Chinese OFDI is attracted to countries with larger energy resources. Finally, this paper finds that the relationship between macroeconomic instability and Chinese OFDI to Africa is insignificant. However, countries with a lower exchange ra