The Impact of China-Africa Trade And Outward Foreign Direct Investment On The Economic Growth Of Sub-Saharan Africa

Emma Serwaa Obobisa

Abstract


This study examines the impact of China-Africa trade and OFDI on the economic growth of Sub-Saharan Africa. A multivariate method context was utilized for the panel data spanning from 2003-2015. Our results, utilizing the Ordinary Least Square (OLS), fixed-effects, random effect and Generalized Method of Moments (GMM) models to 4 countries indicate that China-Africa trade and OFDI has a positive impact on sub-Saharan Africa economic growth. Our findings therefore support the view that the relation between trade openness, OFDI and economic growth is linear for Sub-Saharan Africa. The recommendation of the study is that Sub-Saharan Africa as a developing continent must formulate policies that would create a friendly environment for attracting FDI in order to enable human capital development, technology transfer and economic growth. Also, Sub-Saharan Africa countries must have more effective trade openness in order to boost their economic growth.

 


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