Determinants of Chinese Foreign Direct Investment in Africa - A panel data analysis

Abstract

This thesis examines how different recipient country determinants influence Chinese investors' decisions where to invest in Africa and whether the financial crisis in 2008 has induced a shift in the type of FDI investors engage in. With the help of panel data, this thesis analyses the FDI stock and determinants for 41 different countries in Africa over the period 2003-2018. The thesis finds that Chinese investors are attracted to countries with strong institutions, large markets and stable economic environments. Another central finding is that Chinese investors appear to be more interested in economic stability in middle income countries. Finally, this thesis finds a possible shift of interest among Chinese investors after the financial crisis, from being partly attracted to countries with large amounts of natural resources before the crisis, to countries with stronger institutions and better infrastructure after the crisis.