Impact of Chinese Foreign Direct Investment on the growth of West African Economic and Monetary Union (WAEMU) countries Kodjo N’Souvi, Chen Sun, Badoubatoba Mathieu DISSANI & Folly Dovénam YOVODEVI

Impact of Chinese Foreign Direct Investment on the growth of West African Economic and Monetary Union (WAEMU) countries

Author (s)

Kodjo N’Souvi, Chen Sun, Badoubatoba Mathieu DISSANI & Folly Dovénam YOVODEVI

Abstract

The objective of this paper is to analyze empirically the effect of Chinese FDI on economic growth of countries of the West African Economic and Monetary Union (WAEMU). The data used in this paper come from World Bank except for FDI data, which were taken from the Statistical Bulletins of China’s Outward Foreign Direct Investment, covering the period 2006 to 2018. Using the theoretical framework of the endogenous growth model, this paper performed an econometric approach of fixed-effects and random effects regressions with instrumental variables to make the estimates. The results of our estimates showed that Chinese FDI inflows have negative impact on host countries’ growth, based on the random effects regression, which is appropriate and fits well the data used. In addition, our results indicate that exports of primary goods are negatively correlated with the overall annual growth in the region. Further, infrastructure development and industrialization were found to be one of the critical factors for growth of the countries under investigation. Our findings suggest that Governments of WAEMU countries need to intensify their investment in health and education in order to boost the quality of human capital stock. More importantly, there is a need to promote the production of manufactured goods that are currently imported rather than increasing exports of primary goods. Finally, investing more in infrastructure and industrialization process is fundamental to positively impact the growth of countries in the union.

Key words: Economic growth, Chinese FDI, Random-effects, Fixed- effects, WAEMU.

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Title: Impact of Chinese Foreign Direct Investment on the growth of West African Economic and Monetary Union (WAEMU) countries
Author:

Kodjo N’Souvi, Chen Sun, Badoubatoba Mathieu DISSANI & Folly Dovénam YOVODEVI

Journal Name: Journal of Scientific Reports
Website: https://ijsab.com/jsr
Publisher IJSAB-International
DOI: https://doi.org/10.5281/zenodo.4672465
Media: Online
Volume: 3
Issue: 1
Acceptance Date: 03/04/2021
Date of Publication: 08/04/2021
PDF URL: https://ijsab.com/wp-content/uploads/1015.pdf
Free download: Available
Page: 9-25
First Page: 9
Last Page: 25
Paper Type: Research Paper
Current Status: Published

Cite This Article:

Kodjo N’Souvi, Chen Sun, Badoubatoba Mathieu DISSANI & Folly Dovénam YOVODEVI (2021). Impact of Chinese Foreign Direct Investment on the growth of West African Economic and Monetary Union (WAEMU) countries. Journal of Scientific Reports, 3(1), 9-25. doi: https://doi.org/10.5281/zenodo.4672465

Retrieved from https://ijsab.com/wp-content/uploads/1015.pdf

 

About Author (s)

Kodjo N’Souvi, College of Economics and Management, Shanghai Ocean University, 201306 Shanghai, China.

Chen Sun (corresponding author), College of Economics and Management, Shanghai Ocean University, 201306 Shanghai, China. Email: chensun@shou.edu.cn

 Badoubatoba Mathieu DISSANI, School of Economics, Capital University of Economics and Business, China, 100026.  

Folly Dovénam YOVODEVI, Département tertiaire, Institut des Techniques Avancées, BP 498,   288, Avenue de Cointet, Libreville-Gabon.

 

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DOI: https://doi.org/10.5281/zenodo.4672465

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