Ekonomisk tillväxt i mötet mellan Kina och Afrika

This thesis examines how Chinese foreign direct investment (FDI) affects economic growth in Africa. Over the past two decades, China’s economic engagement in Africa has increased substantially, yet there is no clear consensus in the literature regarding the growth effects of these investments. The aim of this study is therefore to assess whether Chinese FDI is associated with economic growth in Africa. The empirical analysis is based on panel data with two regressions covering 37 and 42 African countries over the period 2003-2023. Economic growth is measured using both GDP per capita growth and GNI per capita growth, which allows us to distinguish between growth in domestic production and growth in income that reaches the country’s residents. By comparing these dependent variables we examine whether Chinese FDI primarily increases domestic production or whether income gains remain within African economies or whether the income may be repatriated to China. Chinese FDI is treated as the main explanatory variable, while a set of macroeconomic and institutional factors are included as control variables. The models are estimated using a random effects framework with clustered robust standard errors to account for unobserved heterogeneity and within country dependence. The results provide no statistically significant evidence that Chinese FDI affects economic growth in Africa. However, the results indicate that initial GDP, inflation and population growth are significant determinants of economic growth in the GDP specification. While trade openness is significant in the GNI specification. Overall, the findings suggest that Chinese investment flows, in isolation, do not appear to be a key driver of economic growth in Africa during the studied period.