Chinese FDI and Economic Growth of Sub-Saharan African Countries: PIM Method and Quantile Regression in Panel Data

Abstract

This article explores the impact of Chinese investment flows on the growth rate of 49 SSA countries over the period from 2003 to 2020. The estimation strategy consists of building the capital stock using the perpetual inventory method (PIM). The quantile estimator has the advantage of being robust in the case of outliers and / or scattered errors because it penalizes deviations less. We will apply the appropriate estimation strategy (Canay, 2011) in order to neutralize the econometric problem of "incident parameters". Our results confirm a positive impact of Chinese investments on GDP per capita in SSA, which remains limited.

Keywords: Chinese FDI, GDP per capita, Sub-Saharan Africa, PIM method, Two-step estimator, Quantile Regression.

JEL Classification : O4, F21, F43

DOI: 10.7176/JESD/12-14-02

Publication date:July 31^st 2021