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The Effect of China’s investment on the Business Environment and Economic Growth of Sub-Saharan Africa in perspective of Belt and Road Initiative

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  • Weldegebriel Abrha Hagoss

    (Business School, University of International Business and Economics (UIBE), Chaoyang District, Beijing, P.R. China)

  • Xia Youfu

    (International trade and industrial economics, University of International Business and Economics, Chaoyang District, Beijing, P.R. China)

Abstract

This study was conducted to analyze the effect of China’s investment on the business environment and Economic growth of Sub-Saharan Africa countries in the perspective of BRI. The study used a neoclassical growth of Solow-type growth model and panel data analysis from the period of 2003 to 2018 on 43 SSA countries for the investment. Two panel regressions were estimated using time and country fixed effects through the fixed effect study result showed that the Chinese investment in the perspective of BRI has positive and statically significant effect on the economic growth and business environment of Sub-Saharan African countries. Which the Chinese investment studied in SSA countries is not a threat and normalized the negative attitude of some western researchers about Sino-Africa. China should have to revise the policy of investment in all countries in the region. Before Chinese FDI flow to the region it should have to study the environment for investment, business, policy and need of the countries. Chinese FDI should have assurance new knowledge, capital and infrastructure in the SSA countries to develop their business policy towards BRI. Besides, there is luck of full data and information of the Chinese FDI to SSA which has a limits research and complete analysis to help policy making with difficult measuring because of all each country has different resources, political systems and histories which has a lack of a uniform and clear model does not all variables might exact influence to the economic growth. Finally, it has an advantage to SSA countries and it will help for the future base of Sino-Africa BRI research and emphasized both relationships.

Suggested Citation

  • Weldegebriel Abrha Hagoss & Xia Youfu, 2021. "The Effect of China’s investment on the Business Environment and Economic Growth of Sub-Saharan Africa in perspective of Belt and Road Initiative," International Journal of Science and Business, IJSAB International, vol. 5(8), pages 161-182.
    • Handle: RePEc:aif:journl:v:5:y:2021:i:8:p:161-182
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    References listed on IDEAS

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    1. Xiaoyang Chen,Maggie & Lin,Chuanhao, 2018. "Foreign Investment across the Belt and Road : Patterns, Determinants, and Effects," Policy Research Working Paper Series 8607, The World Bank.
    2. Weldegebriel Abrha Hagoss & Xia Youfu, 2021. "New Economic cooperation of China with Sub-Saharan Africa in Belt and Road Initiative," International Journal of Science and Business, IJSAB International, vol. 5(8), pages 139-160.
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    Keywords

    China; SSA; FDI; Economic Growth; BRI;
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