Does Chinese FDI in Africa inspire support for a china model of development?

McCauley, John F.; Pearson, Margaret M.; Wang, Xiaonan

doi:10.1016/j.worlddev.2021.105738

Cited by 20 publications

(3 citation statements)

References 37 publications

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“…As argued by Morgan (2019), Chinese aid programs contribute to positive perceptions of China among African citizens. However, McCauley et al (2022) finds that the proximity of African countries to Chinese foreign direct investment decreases their perception of China's development model as the most suitable for their country. This study contributes to this debate by investigating the link between Chinese aid and local tax enforcement perceptions (TEPs).…”

Section: Relationship To the Literaturementioning

confidence: 99%

Chinese Aid Projects and Local Tax Attitudes: Evidence from Africa

Adera

2023

Eur J Dev Res

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The provision of Chinese aid to Africa is characterized by a policy of minimal conditions, whereby aid is extended to African leaders in response to their requests. This approach may afford African leaders greater discretion in expediting the implementation of Chinese aid projects. However, it also renders Chinese aid vulnerable to corruption, as leaders may exploit it to secure political favor for a specific region without the need to adjust government tax and spending policies. Such a characteristic of Chinese aid projects may ultimately shape local attitudes towards taxation and, thereby, influence state–society relations. This paper puts this claim to an empirical test using data from the Afrobarometer surveys and the AidData. The results indicate that exposure to Chinese aid projects creates negative perceptions among citizens regarding the state’s tax enforcement behavior. Interestingly, the study also reveals a positive association between Chinese aid and tax morale or compliance among citizens residing around Chinese aid projects. Noteworthily, these results are confined only to less democratic settings. A similar analysis for World Bank aid projects does not exhibit such a relationship. The findings suggest a tradeoff associated with Chinese aid. On the one hand, it promotes compliance among beneficiaries. On the other hand, it engenders weak tax enforcement perceptions. The implication is that if the negative consequences outweigh the positive ones, Chinese aid has the potential to undermine the government’s reputation for fiscal responsibility, which in turn poses challenges to the development of state capacity through robust fiscal contracts.

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Section: Relationship To the Literaturementioning

confidence: 99%

Chinese Aid Projects and Local Tax Attitudes: Evidence from Africa

Adera

2023

Eur J Dev Res

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“…Other studies conclude that Chinese aid boosts economic growth in African countries (Li, 2021) and improves education and child mortality (Martorano et al, 2020). And while people living close to Chinese‐supported infrastructure projects are generally supportive of a China model of development, those living close to resource‐related projects in African countries are more critical of China as they fear land grabs and job threats (McCauley et al, 2022). Clearly, diversity and complexity—of perception, experience, and analysis—are more prevalent than consensus in relation to SSC.…”

Section: South–south Cooperation In a Multipolar Worldmentioning

confidence: 99%

South–South Cooperation and global development in a multipolar world: China and India in Africa

Banik

Mawdsley

2023

J of Intl Development

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“…Natural resource-seeking FDI "to gain privileged access to resources vis-a-vis competitors" (Dunning and Lundan, 2008, p. 105) is unlikely for EMFs against host developed counterparts, although EMFs do participate through FDI in other less-developed markets (cf. McCauley et al, 2022). Similarly, developed markets will generally not offer efficiencies to EMFs (e.g.…”

Section: Introductionmentioning

confidence: 99%

Whether, how and why home country environments influence emerging market firm acquisition behavior

Reddy

Fabian

Park

2022

IJOEM

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PurposeAccording to the 2019 World Investment Report, recent events in deglobalization have made many countries, especially developed markets, resist inward foreign direct investment (FDI) as ceding control to foreign countries. At the same time, many emerging market firms (EMFs) have been increasing their acquisitions in developed markets. The authors elaborate three unconventional motives that justify such acquisitions, and test whether conditions in home countries related to these motives predict the pursuit of greater or lesser equity control. Understanding how home country conditions may spur seeking greater equity control can help policymakers and business firm decision-makers improve these dynamics.Design/methodology/approachExamining data covering the period 2006–2018, the authors test hypotheses using a sample of 4,130 acquisitions by EMFs into developed markets, and test hypotheses to investigate “How does the institutional and resource environment of an EMF's home country relate to the respective EMF acquisition behavior of seeking equity control?”FindingsThe authors found that higher institutional quality, poorer factor market development, and higher capital market quality in the home country are related to higher equity positions sought.Practical implicationsAcquiring and target firm managers, along with other stakeholders, can gain insights on how to respond to acquisition opportunities by recognizing how home country conditions influence emerging market internationalizing behaviors into developed markets.Originality/valueThe compilation of this data uniquely covers 48 different emerging markets and further concentrates on the relatively less understood pre-deal phase for EMNEs entering developed markets.

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Does Chinese FDI in Africa inspire support for a china model of development?

Cited by 20 publications

References 37 publications

Chinese Aid Projects and Local Tax Attitudes: Evidence from Africa

Chinese Aid Projects and Local Tax Attitudes: Evidence from Africa

South–South Cooperation and global development in a multipolar world: China and India in Africa

Whether, how and why home country environments influence emerging market firm acquisition behavior

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