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Exploration of the Impact of China’s Outward Foreign Direct Investment (FDI) on Economic Growth in Asia and North Africa along the Belt and Road (B&R) Initiative

Author

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  • Alnoah Abdulsalam

    (School of Economics and Trade, Hunan University, Yuelushan, Changsha 410012, China)

  • Helian Xu

    (School of Economics and Trade, Hunan University, Yuelushan, Changsha 410012, China)

  • Waqar Ameer

    (School of Economics and Trade, Hunan University, Yuelushan, Changsha 410012, China
    School of Economics, Shandong Technology and Business University, Yantai 264003, China)

  • AL-Barakani Abdo

    (School of Economics and Trade, Hunan University, Yuelushan, Changsha 410012, China)

  • Jiejin Xia

    (School of Economics and Trade, Hunan University, Yuelushan, Changsha 410012, China)

Abstract

This empirical study has examined the impact of Chinese investments, namely infrastructure, energy, services, other investment sectors, and trade openness on the economies of the 25 Asian and North African countries along with the Belt and Road (B&R) Initiative for a period of 2007 to 2016 using the Johansen Fisher Panel Cointegration Test, Panel Dynamic Ordinary Least Squares (PDOLS) model, and the Toda and Yamamoto technique for testing causality. The findings revealed cointegration among the variables and that the impact of Chinese investments on economic growth in the host countries is positive, but it has a weaker effect, to a certain extent, in all sectors of the host countries while trade openness positively impacts the countries. Furthermore, there is evidence of a unidirectional causality between some FDI (foreign direct investment) economies while the investment in services and other sectors does not cause economic growth in the host countries. Based on the results, the paper proposes that the host countries increase the FDI in the sector of infrastructure, energy, and technology to enhance their economies.

Suggested Citation

  • Alnoah Abdulsalam & Helian Xu & Waqar Ameer & AL-Barakani Abdo & Jiejin Xia, 2021. "Exploration of the Impact of China’s Outward Foreign Direct Investment (FDI) on Economic Growth in Asia and North Africa along the Belt and Road (B&R) Initiative," Sustainability, MDPI, vol. 13(4), pages 1-16, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:1623-:d:492539
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