Date

2-13-2026

Department

Helms School of Government

Degree

Doctor of Philosophy in Public Policy (PhD)

Chair

Michael T Gibson

Keywords

Foreign direct investment, Hausman test, geopolitical interests, global powers, regression analysis, International political economy, China, Sub-Saharan Africa, United States interests

Disciplines

Public Affairs, Public Policy and Public Administration

Abstract

In recent years, China's presence in Sub-Saharan Africa (SSA) has increased. The purpose of this quantitative study is to determine what explains the variation in China’s foreign direct investment (FDI) levels across SSA countries. This research examined how political stability, the Corruption Perceptions Index, natural resources, market size, and trade openness influence Chinese FDI inflows into Africa. The sample comprised 48 SSA countries, and a panel data set covering the period from 2003 to 2022 was used for analysis. The study adopted the international political economy (IPE) theory, which holds that international investment flows depend primarily on the quality of institutions, economic interdependence, domestic policy preferences, and the predictability of the investment environment. Descriptive statistics, including mean, standard deviation, maximum, and minimum, were used in conjunction with inferential statistics, such as regression analysis. Using a random-effects regression model based on the Hausman test, results generally showed that only market size had a significant positive effect on Chinese FDI inflows into Africa. Regionally, trade openness, political stability, natural resources, and corruption perception did not significantly influence Chinese FDI. Separate analyses at the subregional and country levels also indicated that market size does not significantly predict Chinese FDI. The study concludes with policy and research implications. It suggests that SSA countries can attract more Chinese FDI by streamlining bureaucratic procedures for business permits, ensuring economic stability, establishing a clear legal framework for investors, and promoting investment in local markets. For global powers like the US, which have strategic interests in SSA countries, countering Chinese dominance in Africa through FDI is crucial. This is especially important given China's pursuit of global leadership, which could overshadow other critical issues such as political stability, corruption, and environmental concerns. The US should aim to increase private-sector investment by shifting its focus from primarily government-funded infrastructure projects to creating conditions that attract more U.S. private-sector investments, with an emphasis on long-term development. The US should also involve SSA countries in key policy issues such as security, terrorism, and geopolitical interests, so that SSA countries align more closely with the United States rather than with China and consider Russia's recent presence in Africa.

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