Chinese foreign direct investment and economic growth in West Africa: Evidence from Pooled Mean Group model

Over the last decade, diverse efforts have been deploy in place by various governments of the developing economies to attract more inward China FDI and accelerate its economic growth remains one of the most important issues in the economic debates. Many empirical works support the impact of Chinese FDI flows on economic growth, but some do not. West Africa, high poverty, non-existing markets, low savings and terrorism-torn economy and political crisis, countries may find in FDI an important and potential source of finances. Therefore, this paper is attempts to evaluate the long-run and short-run relationships between China FDI and economic growth of West Africa by using Pooled Mean Group (PMG) models over the period of 2003–2015. The Pooled Mean Group results provide strong evidence on the significantly positive effects of China FDI on West Africa’s economic growth (real GDP per capita).However; the causality results suggest that China FDI hasn’t causal effects on West Africa ‘economic growth. This can be concluded that an additional investment for Chinese investor and technology transfer is sufficiently supported in West Africa.