Dynamic Relationship between Chinese FDI, Agricultural and Economic Growth in West African: An Application of the Pool Mean Group Model

Fofana, Kankou Hadia; Xia, Enjun; Traoré, Mamadou

doi:10.1088/1742-6596/1060/1/012066

Cited by 10 publications

(9 citation statements)

References 18 publications

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“…However, it will inhibit the growth of agricultural GTFP after a certain critical point [35]. In response to Chinese FDI in Western Africa, Fofana [36] investigated the contribution of Chinese foreign investment in agriculture sectors and economic growth of West African countries and concluded that Chinese FDI is supporting agriculture, domestic investment, and economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Does Chinese FDI, Climate Change, and CO2 Emissions Stimulate Agricultural Productivity? An Empirical Evidence from Pakistan

et al. 2020

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Pakistan’s agricultural sector growth is dwindling from the last several years due to insufficient foreign direct investment (FDI) and a drastic climate change-induced raise in temperature, which are severely affecting agricultural production. The FDI has paramount importance for the economy of developing countries as well as the improvement of agricultural production. Based on the time series data from 1984 to 2017, this paper aims to highlight the present situation of the agriculture sector of Pakistan and empirically analyze the short-run and long-run impact of Chinese foreign direct investment (CFDI), climate change, and CO2 emissions on agricultural productivity and causality among the variables. The Autoregressive Distributed Lag Model (ARDL) model and Granger Causality test were employed to find out the long-run, short-run, and causal relationships among the variables of interest. Furthermore, we have employed the Error Correction Model (ECM) to know the convergence of the equilibrium path. The bound test results verified the existence of a long-run association, and the empirical findings confirmed that Chinese FDI has a significant and positive impact, while climate change and CO2 emissions has negative impact on the agricultural growth of Pakistan both in the short-run and long-run. Granger Causality test results revealed that variables of interest exhibit bi-directional and uni-directional causality. The sector-wise flow of FDI reveals that the agriculture sector of Pakistan has comparatively received a less amount of FDI than other sectors of the economy. Based on the findings, it was suggested to the Government of Pakistan and policymakers to induce more FDI in the agriculture sector. Such policies would be helpful for the progress of the agriculture sector as well as for the economic growth of Pakistan.

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Section: Literature Reviewmentioning

confidence: 99%

Does Chinese FDI, Climate Change, and CO2 Emissions Stimulate Agricultural Productivity? An Empirical Evidence from Pakistan

et al. 2020

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“…A similar study in China by Fafona et al test the long run relationship between Chinese FDI, agriculture and economic growth in host country with annual data from 2003 to 2015 using pool mean group and VECM panel granger causality model. The result indicates that Chinese FDI, domestic investment and agriculture spur economic growth contrary to some studied which found that Chinese FDI does not cause economic growth [13]. The result further shows that there is no significant panel-VECM granger causality from Chinese FDI to economic growth, from economic growth to Chinese FDI, from agriculture to economic growth and from economic growth to agriculture.…”

Section: Omri Et Al Also Investigated the Causality Links Between Co2...mentioning

confidence: 60%

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2022

JERR

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This study examines the effect of foreign direct investment through economic activities on environmental quality of Nigerian economy by using annual data from 1981 to 2020. Our estimation of simultaneous equation model was done through system GMM where we estimate scale, technique and composition effects of foreign direct investment. Our results reveal that foreign direct investment improves economic activities through scale effect and damage the environmental quality through technique and composition effects. The contribution of physical and human capital investment becomes more prominent in attracting direct investment inflow in the country. This however suggests that our institution should be strengthened to ensure adoption of environmental friendly technology in the production process by both local and foreign investors. Also, more investment should be made on physical and human capitals in the country to attract more foreign direct investment.

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“…Furthermore, Dong & Fan(2020) Atitianti & Dai(2021) showed that Chinese OFDI has a robust positive impact on welfare in African countries. Additionally, In addition, Arogundade et al (2021);and Fofana et al (2018) unveiled that the increase in Chinese OFDI inflows in West Africa promotes not only economic growth, and domestic investment, but also agricultural land. Doku et al (2017) used the fixed effect method and the Granger causality test to investigate the impact of Chinese OFDI on economic growth in Africa.…”

Section: Chinese Ofdi and Economic Growthmentioning

confidence: 99%

Do Governance and Chinese OFDI Influence Differentially Economic Growth Across African Regions and Income Groups?

FAMBO,

Shunqi

2023

Preprint

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Governance plays a pivotal role in shaping how FDI impacts economic growth in Africa. Weak governance in many African countries has posed a barrier to realizing the full potential of foreign investment on the continent. Our study, based on panel data from 41 African countries spanning 2005 to 2020 and employing Sys-GMM and pooled OLS econometrics methods, confirms that both Chinese OFDIs and governance independently contribute positively to economic growth in African nations. However, when considering their combined effect, it is positive but statistically insignificant. When examining regional and income groups, we found significant positive impacts in Central and East Africa, negative and significant impacts in North Africa, and varying effects elsewhere. In summary, governance is pivotal in optimizing the impact of Chinese OFDI on African economic growth, with regional and developmental nuances. Hence, we recommend that African governments and Chinese stakeholders join efforts to improve governance and increase Chinese OFDI in Africa.

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Dynamic Relationship between Chinese FDI, Agricultural and Economic Growth in West African: An Application of the Pool Mean Group Model

Cited by 10 publications

References 18 publications

Does Chinese FDI, Climate Change, and CO2 Emissions Stimulate Agricultural Productivity? An Empirical Evidence from Pakistan

Does Chinese FDI, Climate Change, and CO2 Emissions Stimulate Agricultural Productivity? An Empirical Evidence from Pakistan

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Do Governance and Chinese OFDI Influence Differentially Economic Growth Across African Regions and Income Groups?

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