Growth Spillovers.Do China's trade & Investiment matter for Africa growth?

01 Dec 2012 20
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Summary

The paper uses an endogenous growth model and GMM estimates to investigate the influence of international trade and investment by China in 44 Sub-Saharan African economies. The paper  show that exports to China from Sub-Saharan African countries have a growing impact on their economic growth, although it is yet to overtake the influence of exports to the rest of the world on growth. More importantly, the impact of exports to the rest of the world has become less influential than before. In particular, in Sub-Saharan African countries which received foreign direct investments from China, exports to China have a significant impact on growth. Impact of Chinese FDI on African growth emerges in a sample of selected Sub-Saharan African countries which receive Chinese FDI, while the impact of exports to the rest of the world on African growth still dominate over Chinese.

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