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Accepted Paper:

Heterogeneity and adaptation in Chinese FDI to Africa: Evidence from Angola and Ethiopia  
Weiwei Chen (The Open University) Carlos Oya (SOAS University of London)

Paper short abstract:

Chinese FDI to Africa has grown rapidly but unevenly across countries and sectors. The main drivers of investment depend on the varieties of Chinese capital and contextual factors in African countries. In addition, heterogeneity among firms is very significant, driven by a combination of factors.

Paper long abstract:

We developed this paper based on a combination of sources from our ESRC projects ("Chinese firm's employment dynamics in Ethiopia's and Angola's manufacturing and construction sectors (2015/19); "Learning to Manage the Factory Floor in Ethiopia: Skills, Work Cultures and Organisational Capabilities in Ethiopia's Light Manufacturing" (2019/21)), Weiwei Chen's own PhD thesis on Chinese private OFDI in Ethiopia, and an update of data (2019/21).

We argue that Chinese FDI to SSA has grown rapidly since the mid-2000s but unevenly across countries and sectors.

The main drivers of investment depend on the varieties of Chinese capital (SOE vs private and variations among private firms) and contextual factors in African countries, especially the role of the state (e.g. Ethiopia's industrial policy vs Angola's infrastructure boom). In addition, heterogeneity among Chinese firms is very significant, driven by a combination of factors: sector specificity; prime movers; provincial origin/business networks; scale; characteristics of entrepreneurs (family vs corporate business).

Moreover, we provide evidence on processes of adaptation, in relation to business practices, sector focus, domestic vs export orientation and labour regimes. The evidence of adaptation shows a certain degree of resilience as well as the capacity to respond to new imperatives, especially those driven by contextual factors in the host countries. We suggest that Chinese firms tend to adapt and shift as quickly it not more quickly than other comparator firms in the same sectors.

Panel Econ25
Diversifying dependence or structural transformation: China's engagement in Africa
  Session 2 Saturday 3 June, 2023, -