| Journal of Economics and Management Volume 20, No. 1 March, 2024 |
| Impact of Institutional Quality Indicators on Chinese Foreign Direct Investment Flow to Selected West African Countries |
| Oghenebrume David Akatugba |
| Department of Economics, Faculty of Social Sciences, Delta State University, Abraka, Nigeria |
| Christopher Orido Orubu |
| Department of Economics, Faculty of Social Sciences, Delta State University, Abraka, Nigeria |
| Peter Chukwuyem Egbon |
| Department of Economics, Faculty of Social Sciences, Delta State University, Abraka, Nigeria |
| Abstract |
| This study investigated the impact of institutional quality indicators on Chinese FDI flow to selected West Africa countries during the period 2002-2020. The study employed standard OLS and standard date panel techniques to differentiate between efficiency effects of fixed and random effects. The study provided empirical evidence that supports the Dunning eclectic macroeconomic theory of FDI flow. The results of the analysis indicated that control of corruption(CC), political stability and absence of violence (PV), regulatory quality (RQ), rule of law (RL), voice and accountability (VA), market size (rGDP) and exchange rate (EXR) were found to be positively related to Chinese FDI flow to the selected West African countries. The coefficient of rGDP and PV are statistically significant. The study results revealed government effectiveness (GE), trade openness (TOP), debt to GDP ratio (DEBT), and inflation (INF) variables have negative and not statistically significant impacts on Chinese FDI inflows. In light of the findings, higher levels of trade openness and better governance structures are less likely to attract Chinese FDI in the long run. Though, promoting good governance is better to support strong open trade policies which improve investment climate and level of rGDP. Also, the coefficients of INF and DEBT are in line with economic theories. However, INF and DEBT variables cannot significantly explain the variation in Chinese FDI inflows. The results revealed that geographical distance does not encourage the inflows of FDI from China. This study concludes that improvements in the institutional qualities are keys to spurring Chinese FDI inflows. |
| Keywords：Institutional Quality, Foreign Direct Investment, Policy Reforms, China, and West Africa. |
| JEL Classifications：O0, O1, O4, O5, F0 |
| BACK |