IDEAS home Printed from https://ideas.repec.org/b/ces/ifofob/71.html
   My bibliography  Save this book

Involvement of German Companies in Africa

Author

Listed:
  • Gabriel Felbermayr
  • Erdal Yalcin

Abstract

Africa is a continent with huge potential. However, it also faces enormous challenges. Recently, economic growth has been high in many countries. Africa's population will double by 2050, but per capita incomes remain very low. The involvement of German firms in Africa is rather weak, with the eception of South Africa. Germany is Africa's fifth most important supplier, but its market share in the continent has eroded from 14% in 1992 to 5% in 2013. Germany mostly exports manufactured goods, while agricultural goods tend to play only a minor role. Germany is the eighth most important market for African exporters, but growth in trade has lagged significantly behind the dynamics seen in Africa's trade relationships with other countries. Interestingly, energy and mining products dominate Germany’s imports to a lesser degree than those of other countries. This is related to the fact that there is virtually no foreign direct investment (FDI) by German firms in extractive resource sectors. Instead, German FDI is concentrated in the know-how intensive automotive industry. However, Africa acounts for less than 1% of Germany's total FDI and this figure is only growing very slowly. German businesses could stand to profit from growth opportunities in Africa; and their involvement could also spur local economic development. An appropriate institutional framework and political assistance is required to facilitate more trade and investment. For example, the study shows that free trade agreements are highly effective in fostering African exports, and that bilateral investment treaties are necessary conditions for German FDI in Africa.

Suggested Citation

  • Gabriel Felbermayr & Erdal Yalcin, 2016. "Involvement of German Companies in Africa," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 71.
  • Handle: RePEc:ces:ifofob:71
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/ifo_Forschungsberichte_71_2016_Felbermayr_Yalcin_Afrika.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Sposi & B Ravikumar & Piyusha Mutreja, 2014. "Capital goods trade and economic development," 2014 Meeting Papers 1374, Society for Economic Dynamics.
    2. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    3. Gabriel Felbermayr & Inga Heiland & Erdal Yalcin, 2014. "The Role of State Export Credit Guarantees for German Firms," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(03), pages 52-55, August.
    4. Gabriel Felbermayr & Erdal Yalcin & Alexander-Nikolai Sandkamp & Philipp Lang, 2015. "Beschäftigungseffekte der Exportkreditgarantien des Bundes und globale Wertschöpfungsketten," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 68, October.
    5. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    6. repec:bla:germec:v:10:y:2009:i::p:317-338 is not listed on IDEAS
    7. Henning Klodt & Martin Klein & Marc Bungenberg & Gabriel Felbermayr & Gerhard Schick, 2014. "Investitionsschutzabkommen: mehr Rechtssicherheit oder verzicht auf Souveränität?," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 94(7), pages 459-478, July.
    8. Peter Egger & Valeria Merlo, 2012. "BITs Bite: An Anatomy of the Impact of Bilateral Investment Treaties on Multinational Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1240-1266, December.
    9. Tobias Lieb & Erdal Yalcin, 2015. "Länderrisiko und ausländische Direktinvestitionen," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(11), pages 22-32, June.
    10. Gopinath, G. & Helpman, . & Rogoff, K. (ed.), 2014. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 4, number 4.
    11. Peter Egger & Valeria Merlo, 2007. "The Impact of Bilateral Investment Treaties on FDI Dynamics," The World Economy, Wiley Blackwell, vol. 30(10), pages 1536-1549, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kappel, Robert, 2017. "New Horizons for Germany's Africa Policy," GIGA Working Papers 303, GIGA German Institute of Global and Area Studies.
    2. Ivens, Sören & Kranzusch, Peter, 2018. "Subsahara-Afrika als Zielregion außenwirtschaftlicher Aktivitäten von kleinen und mittleren Unternehmen," Daten und Fakten 23, Institut für Mittelstandsforschung (IfM) Bonn.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Glenn Magerman & Karolien De Bruyne & Jan Van Hove, 2020. "Pecking order and core‐periphery in international trade," Review of International Economics, Wiley Blackwell, vol. 28(4), pages 1113-1141, September.
    2. Brandt, Loren & Li, Bingjing & Morrow, Peter M., 2021. "Processing trade and costs of incomplete liberalization: The case of China," Journal of International Economics, Elsevier, vol. 131(C).
    3. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Cote, Christine & Estrin, Saul & Shapiro, Daniel, 2020. "Expanding the international trade and investment policy agenda: the role of cities and services," LSE Research Online Documents on Economics 104003, London School of Economics and Political Science, LSE Library.
    5. Magerman, Glenn & Studnicka, Zuzanna & Van Hove, Jan, 2016. "Distance and border effects in international trade: A comparison of estimation methods," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 10, pages 1-31.
    6. Chen, Maggie Xiaoyang & Lin, Chuanhao, 2020. "Geographic connectivity and cross-border investment: The Belts, Roads and Skies," Journal of Development Economics, Elsevier, vol. 146(C).
    7. Sonali Chowdhry & Julian Hinz & Katrin Kamin, 2022. "Brothers in arms: The value of coalitions in sanctions regimes," RSCAS Working Papers 2022/62, European University Institute.
    8. Patrick Bisciari, 2019. "A survey of the long-term impact of Brexit on the UK and the EU27 economies," Working Paper Research 366, National Bank of Belgium.
    9. Jung, Benjamin, 2015. "Allocational efficiency with heterogeneous firms: Disentangling love of variety and market power," Economics Letters, Elsevier, vol. 134(C), pages 141-143.
    10. Alberto Osnago & Nadia Rocha & Michele Ruta, 2019. "Deep trade agreements and vertical FDI: The devil is in the details," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(4), pages 1558-1599, November.
    11. Rafael Dix-Carneiro & João Paulo Pessoa & Ricardo Reyes-Heroles & Sharon Traiberman, 2023. "Globalization, Trade Imbalances, and Labor Market Adjustment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(2), pages 1109-1171.
    12. Evgeny N. Smirnov & Sergey A. Lukyanov, 2021. "Instability of international trade and approaches to optimal regulation," Upravlenets, Ural State University of Economics, vol. 12(5), pages 21-31, November.
    13. Lorenzo Caliendo & Robert C. Feenstra & John Romalis & Alan M. Taylor, 2015. "Tariff Reductions, Entry, and Welfare: Theory and Evidence for the Last Two Decades," NBER Working Papers 21768, National Bureau of Economic Research, Inc.
    14. Agnosteva, Delina E. & Anderson, James E. & Yotov, Yoto V., 2019. "Intra-national trade costs: Assaying regional frictions," European Economic Review, Elsevier, vol. 112(C), pages 32-50.
    15. Alcalá, Francisco & Solaz, Marta, 2018. "International Relocation of Production and Growth," CEPR Discussion Papers 13422, C.E.P.R. Discussion Papers.
    16. Krolikowski, Pawel M. & McCallum, Andrew H., 2021. "Goods-market frictions and international trade," Journal of International Economics, Elsevier, vol. 129(C).
    17. repec:wsr:ecbook:2021:i:vii-006 is not listed on IDEAS
    18. Iliev, Dragomir & Stefanov, Galin & Yotov, Yoto, 2016. "Estimating Bulgaria’S Trade Borders With The Eu An Application Of The Empirical Gravity Model Of Trade," Business Management, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 4, pages 1-3.
    19. Fontagné, Lionel & Guimbard, Houssein & Orefice, Gianluca, 2022. "Tariff-based product-level trade elasticities," Journal of International Economics, Elsevier, vol. 137(C).
    20. Sharon Traiberman, 2017. "Occupations and Import Competition," 2017 Meeting Papers 1237, Society for Economic Dynamics.
    21. Philippe Aghion & Antonin Bergeaud & Matthieu Lequien & Marc J. Melitz, 2024. "The Heterogeneous Impact of Market Size on Innovation: Evidence from French Firm-Level Exports," The Review of Economics and Statistics, MIT Press, vol. 106(3), pages 608-626, May.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F35 - International Economics - - International Finance - - - Foreign Aid

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ifofob:71. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/ifooode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.