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Determinants of Inward Bound Foreign Direct Investment in Afirca and China: FDI Determinants in Africa and China

Determinants of Inward Bound Foreign Direct Investment in Afirca and China: FDI Determinants in Africa and China
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Author(s): Tafirenyika Sunde (Namibia University of Science and Technology, Namibia)
Copyright: 2021
Pages: 19
Source title: Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization
Source Author(s)/Editor(s): Yilmaz Bayar (Bandirma Onyedi Eylul University, Turkey)
DOI: 10.4018/978-1-7998-4459-4.ch024

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Abstract

The contribution of the chapter is to compare the empirical determinants of inward bound foreign direct investment in China and Africa and also find out what makes China an attractive FDI destination. To achieve this, the chapter analyses 15 empirical studies on China and 15 empirical studies on African countries. First, the chapter finds that the determinants of FDI common to both Africa and China include the market size, economic stability, resource, infrastructure, and efficiency-seeking factors. Second, the chapter establishes that the determinants of FDI specific to African countries include political stability, borrowing costs, country risks, access to land and property registration. Third, the chapter finds that the determinants of FDI that are specific to China include international visibility of regions, internal expenditure on research and development, geographic location and proximity (special economic zones and the opening of coastal cities), total cultural variations and the liberalisation of the Chinese economy.

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