Chinese FDI and Debt-trap Diplomacy
(2021) NEKH03 20211Department of Economics
- Abstract
- This empirical study seeks to initiate a new field of study. Through panel data analysis the relationship between Chinese FDI, non-Chinese FDI, and government debt in Sub-Saharan Africa is investigated. The model is expanded to include resource endowment and political stability variables. This is contextualized with the narrative of debt-trap diplomacy. This controversial notion is relatively well-trodden ground in the literature, however, not in the context of FDI and its effect on government debt. The panel consists of 46 countries, over the period 2003-2019. Granger Causality testing is employed. The result shows positive effects on government debt from Chinese FDI and a negative effect on non-Chinese FDI. Where a negative effect is... (More)
- This empirical study seeks to initiate a new field of study. Through panel data analysis the relationship between Chinese FDI, non-Chinese FDI, and government debt in Sub-Saharan Africa is investigated. The model is expanded to include resource endowment and political stability variables. This is contextualized with the narrative of debt-trap diplomacy. This controversial notion is relatively well-trodden ground in the literature, however, not in the context of FDI and its effect on government debt. The panel consists of 46 countries, over the period 2003-2019. Granger Causality testing is employed. The result shows positive effects on government debt from Chinese FDI and a negative effect on non-Chinese FDI. Where a negative effect is expected. The positive effect is increased both in the case of natural resources and political stability. The conclusions drawn from the study are; that the effects of Chinese FDI are different from non-Chinese FDI and that there seems to be a link between higher effects on government debt and resource endowment and political stability. This does support the nation of debt-trap diplomacy, however, this study alone is certainly not able to confirm or deny its existence. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9055560
- author
- Fallenius, Jonas LU
- supervisor
- organization
- course
- NEKH03 20211
- year
- 2021
- type
- M2 - Bachelor Degree
- subject
- keywords
- Foreign direct investment, China, Sub-Saharan Africa, debt-trap diplomacy
- language
- English
- id
- 9055560
- date added to LUP
- 2021-07-05 13:30:50
- date last changed
- 2021-07-05 13:30:50
@misc{9055560, abstract = {{This empirical study seeks to initiate a new field of study. Through panel data analysis the relationship between Chinese FDI, non-Chinese FDI, and government debt in Sub-Saharan Africa is investigated. The model is expanded to include resource endowment and political stability variables. This is contextualized with the narrative of debt-trap diplomacy. This controversial notion is relatively well-trodden ground in the literature, however, not in the context of FDI and its effect on government debt. The panel consists of 46 countries, over the period 2003-2019. Granger Causality testing is employed. The result shows positive effects on government debt from Chinese FDI and a negative effect on non-Chinese FDI. Where a negative effect is expected. The positive effect is increased both in the case of natural resources and political stability. The conclusions drawn from the study are; that the effects of Chinese FDI are different from non-Chinese FDI and that there seems to be a link between higher effects on government debt and resource endowment and political stability. This does support the nation of debt-trap diplomacy, however, this study alone is certainly not able to confirm or deny its existence.}}, author = {{Fallenius, Jonas}}, language = {{eng}}, note = {{Student Paper}}, title = {{Chinese FDI and Debt-trap Diplomacy}}, year = {{2021}}, }