Foreign direct investment and regional trade
A key challenge for development of the SADC region is to attract more foreign direct investment (FDI). Since motivations are likely to differ among investors from different countries and in different industries, as will the development impact of the investments, it is crucial that policies to attract FDI take these differences into account. This requires knowledge on the factors that drive FDI from different countries, and associated policy levers for the SADC countries.
In the context of recent increases in FDI from China into Africa, it is of particular importance to increase knowledge on the drivers of Chinese FDI. A number of studies have suggested that there are distinct differences between Chinese economic involvement in Africa, and the involvement of other countries. In particular, Chinese foreign direct investment has been argued to be driven by different factors, such as the quest for natural resources, than FDI from other countries. Despite these claims, there is a dearth of studies which actually document these differences, by empirically testing the determinants of Chinese FDI, and comparing the results to FDI from other regions.
This project will perform an empirical study of determinants of Chinese foreign direct investment. The aim will be to test whether there are significant differences in Chinese FDI as compared to FDI from other regions. The implications for the economies of SADC will be explored. The study will use FDI data from UNCTAD and/or BusinessMap Foundation.
