Changing Patterns of Foreign Direct Investments - A Comparative Study of Chinese Investment Behavior in Sub-Saharan Africa

Sammanfattning: In the light of changing global foreign direct investment (FDI) patterns, economic research has started to pay an increasing amount of attention to China as one of the new main investor countries, and emphasize the implications of this in the world economy. This thesis examines Chinese FDI flows and investor behavior in Sub-Saharan Africa (SSA), and relates this to the academic debate surrounding its perceived controversy. Country-level panel data is used to estimate Chinese FDI flows through two different types of regressions, in order to distinguish what factors are significant in Chinese FDI flows to SSA. This is done in order to empirically analyze whether the characteristics of Chinese investor behavior in SSA differ from how other influential investor countries act in this region, and moreover, investigate how the obtained results correspond with general theories of FDI. The results of the empirical analysis are somewhat ambiguous. They indicate that China does follow the predictions expected from general FDI theory, but may have a more pronounced inclination towards the resource seeking type of FDI, where investments are linked mainly to host country natural resources. Moreover, it is found that both China and other major investors seem to be driven by market seeking FDI motives, attracted by the emerging markets in SSA.