A Study in the Trade Effect of China’s Outward Foreign Direct Investment in Ethiopia Based on GTAP-FDI Model
Abstract
This paper studies China's trade effect on OFDI of Ethiopia and its impact on local economic development, and explores whether China's direct investment in Ethiopia has a positive or negative impact on the country's economic development. The main conclusions of this study include the following three points. First, China's direct investment in Ethiopia started late and, in general, accounted for a small proportion of China's direct investment in Africa. Second, China's direct investment in Ethiopia shows a creative trend of export. China's direct investment in Ethiopia has shown an obvious export creation effect than that of imports. Third, the results of GTAP simulation show that China's direct investment has a positive impact on Ethiopia's macro economy, promoting the growth of GDP. The impact of Chinese direct investment on specific industries, such as transportation construction and construction engineering, is more obvious. These results indicate that China's OFDI in Ethiopia has played a positive role in the local economic development.
Keywords
Full Text:
PDFReferences
Ren, YR. 2017. The China-Africa trade and investment mechanism to examine the effects of industrial transformation in Africa. University of International Business and Economics, Beijing.
Kabemba, C. 2016. “China-democratic republic of Congo relations: From a beneficial to a developmental cooperation.” African Studies Quarterly, Vol.16, No.3:73-87.
Dunning, J. and Narula, R.. 2003. “Foreign direct investment and governments: catalysts for economic restructuring”. Routledge.
Hymer, S. H. 1976. “The international operations of national firms: A study of direct foreign investment.” M.I.T. Press, Cambridge, MA.
Campbell, T. 2012. “The Impact of Foreign Direct Investment , No.FDI Inflows on Economic Growth in Barbados: An Engle-Granger Approach”. International Journal of Public Administration, 2012, Vol.35, No.4.
Inekwe, J. N..2013. “FDI, employment and economic growth in Nigeria”. African Development Review, Vol.25, No.4: pp.421-433.
Fan, S. 2013. “Relationship between FDI and economic growth: examples of China and South Africa”. Journal of Guizhou University of Finance and Economics, Vol.31, No.2: pp.106.
Adamu, A., & Barde, B. E. 2012. “Foreign direct investment and the performance of manufacturing firms in Nigeria”. Research in Accounting in Emerging Economies, Vol.12:pp.171-183.
Xie S. H., Wang, Q. & Gan, C. 2018. “Spatial differences and influencing factors of FDI in African countries”. Journal of Zhejiang Normal University , No.social science edition, Vol.43, No.05: pp.81-86.
Chen, Y., Ma, L. & Zhong C. B.2012. “Determinants of Chinese investment in Africa: an empirical analysis from the perspective of integrated resources and institutions”. The Journal of World Economics, Beijing. Vol.13, No.10: pp.91-112.
Tian, Z., Dong H, Y. 2015. “Trade effect and empirical study of China's direct investment in Africa”. Journal of Research on Development. Vol.15, No.3: pp.117-121.
United Nations. 2015. Growth and Transformation Plan II, United Nations Website, retrieved 23rd September 2019,< https://ethiopia.un.org/15231-growth-and- transformation-plan-ii>.
DOI: http://dx.doi.org/10.18686/fm.v7i6.5932
Refbacks
- There are currently no refbacks.
