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Modern Trends in Chinese Foreign Direct Investment in Africa: An OLI Approach

Author

Listed:
  • Henri Bezuidenhout

    (North-West University, South Africa)

  • Ewert P. J. Kleynhans

    (North-West University, South Africa)

Abstract

This study evaluates the subtle differences that the various types of foreign direct investment (FDI) of China in Africa offers, as revealed by the data, using the ‘Ownership, Location and Internalisation Advantages’ OLI approach. Chinese FDI is analysed using source country comparisons, sectoral comparisons and an investigation of Chinese fdi practices. Data visualisation techniques and analyses infer similarities and differences between Chinese and other investors in Africa. These alternativ emethods are driven by the nature of the available data and its resulting statistical possibilities. The significance of this study is that it disambiguates the available data and compares along theory. Many stylised facts are assumed concerning Chinese FDI; this study, however, quantifies and tests these assumptions. The results show that China follows investment patterns of other investors, although heavily skewed towards oil, coal and gas, and other resource sectors. China otherwise tends to invest in medium growth, diversified economies, predominantly Nigeria and Egypt; except in Ethiopia where investment in communications dominates;Cameroon where chemicals dominate; Angola where investments in real estate outperform investment in the coal, oil and gas; and in South Africa and Tanzania that have a more even spread between sectors compared to the rest of the continent.

Suggested Citation

  • Henri Bezuidenhout & Ewert P. J. Kleynhans, 2018. "Modern Trends in Chinese Foreign Direct Investment in Africa: An OLI Approach," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 16(3 (Fall)), pages 279-300.
    • Handle: RePEc:mgt:youmgt:v:16:y:2018:i:3:p:279-300
    DOI: 10.26493/1854-6935.16.279-300
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    References listed on IDEAS

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    3. Matthew J. Slaughter, 2004. "Skill Upgrading in Developing Countries: Has Inward Foreign Direct Investment Played a Role?," Palgrave Macmillan Books, in: William Milberg (ed.), Labor and the Globalization of Production, chapter 6, pages 121-145, Palgrave Macmillan.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    foreign direct investment; FDI; Africa; China; OLI; eclectic paradigm;
    All these keywords.

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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