Foreign Direct Investment from China, India, and South Africa in sub‐Saharan Africa: A New or Old Phenomenon?

John Henley, Stefan Kratzsch, Mithat Külür and Tamer Tandogan

in Southern Engines of Global Growth

Published in print April 2010 | ISBN: 9780199580606
Published online May 2010 | e-ISBN: 9780191723353 | DOI:

Series: WIDER Studies in Development Economics

Foreign Direct Investment from China, India, and South Africa in sub‐Saharan Africa: A New or Old Phenomenon?

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The burgeoning literature on outward foreign direct investment (OFDI) from emerging markets has largely focused on analysing the motives of investors as reported by parent companies. This chapter, instead, focuses on firm‐level investments originating from China, India, or South Africa in fifteen host countries in sub‐Saharan Africa (SSA). The analysis is based on a subset of firms drawn from the overall sample of 1,216 foreign‐owned firms participating in the UNIDO Africa Foreign Investor Survey, carried out in 2005. The sample of investments originating from China, India, and South Africa is analysed in terms of firm characteristics, past and forecast performance in SSA over three years, and management's perception of ongoing business conditions. Comparisons are made with foreign investors from the North. The chapter concludes that, while investors in SSA from the three countries are primarily using their investment to target specific markets, they are largely operating in different sub‐sectors. While there appear to be specific features that firms from a given country of origin share, there are no obvious features at an operating level that they all share apart from market seeking.

Keywords: China; India; market‐seeking; South Africa; South—South foreign direct investment; sub‐Saharan Africa

Chapter.  8178 words.  Illustrated.

Subjects: Economic Development and Growth

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