An Empirical Study On The Factors Affecting China 's Direct Investment In Africa

Recently, Africa is attracting more and more foreign direct investment, not only the developed countries that already have lots of trade and investment relations in history, but also the developing countries like China. Nowadays, China’s role in Africa is inevitable and more sparkly. China’s direct investment in Africa is growing very fast in recent decades, besides China has a unique situation and systems, which attract the attention of scholars from around the world. However, most of the studies focus on the theoretical analyses and the empirical analyses are far more less. Therefore, this paper is trying to work on an empirical analysis.This paper goes through the China-Africa relations, the current situation of China’s direct investment in Africa and the causes and implications of China’s direct investment in Africa. After these, the author divides the causes of China’s direct investment in Africa into four parts, market size, trade volume, resources and risks. The author chooses33African countries for the empirical study and uses the panel data model. The empirical result shows that the most influential causes are from resources and risks. But the more energy a country has, the less investment from China. Likewise, the higher the corruption risk, the more the investment from China. On the contrary, the high social tension risk will hinder the investment from China.