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The Effect of Foreign Direct Investment on Economic Growth in African Countries: Investments from China versus Investments from the Western World

Särnholm, Jenny LU (2020) NEKH02 20192
Department of Economics
Abstract
The purpose of this thesis is to investigate if there is a difference in the effect of foreign direct investment (FDI) on economic growth depending on whether the FDI comes from China or the Western world. This study investigates the effect of FDI on economic growth in 44 African countries from 2003 to 2017, based on panel data. According to growth theory, an increase in investments leads to an increase in economic growth. The results of the analysis show that FDI from China and FDI from the Western world are not significant for economic growth in African countries. However, when including an interaction variable between FDI and political stability, FDI from the Western world becomes significant, which implies a difference between FDI from... (More)
The purpose of this thesis is to investigate if there is a difference in the effect of foreign direct investment (FDI) on economic growth depending on whether the FDI comes from China or the Western world. This study investigates the effect of FDI on economic growth in 44 African countries from 2003 to 2017, based on panel data. According to growth theory, an increase in investments leads to an increase in economic growth. The results of the analysis show that FDI from China and FDI from the Western world are not significant for economic growth in African countries. However, when including an interaction variable between FDI and political stability, FDI from the Western world becomes significant, which implies a difference between FDI from China and FDI from the Western world. (Less)
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author
Särnholm, Jenny LU
supervisor
organization
course
NEKH02 20192
year
type
M2 - Bachelor Degree
subject
keywords
FDI, Economic growth, Africa, China, The Western world
language
English
id
9002278
date added to LUP
2020-02-25 10:58:40
date last changed
2020-02-25 10:58:40
@misc{9002278,
  abstract     = {{The purpose of this thesis is to investigate if there is a difference in the effect of foreign direct investment (FDI) on economic growth depending on whether the FDI comes from China or the Western world. This study investigates the effect of FDI on economic growth in 44 African countries from 2003 to 2017, based on panel data. According to growth theory, an increase in investments leads to an increase in economic growth. The results of the analysis show that FDI from China and FDI from the Western world are not significant for economic growth in African countries. However, when including an interaction variable between FDI and political stability, FDI from the Western world becomes significant, which implies a difference between FDI from China and FDI from the Western world.}},
  author       = {{Särnholm, Jenny}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Effect of Foreign Direct Investment on Economic Growth in African Countries: Investments from China versus Investments from the Western World}},
  year         = {{2020}},
}