Author: Ming Wang.
Despite much research regarding Chinese involvement in African energy resources, there has been a lack of empirical evidence to support the claim. This paper conducts an empirical study to investigate the key determinants of China's outward foreign direct investment (OFDI): OFDI flow and OFDI stock to African countries in aspects of types of energy resources. The paper tests hypotheses and builds models using official data collected from U.S. Government Energy Information Administration (EIA) and the Chinese Ministry of Foreign Commerce (MOFCOM). The findings suggest that China's OFDI flow to Africa is driven by oil resources in recipient countries. In the linear multiple regression model, oil supply is identified as the primary determinants of China's OFDI flow to African countries among all the other types of energy resources. Neither oil supply, nor natural gas, nor coal can be identified as major determinants of China's OFDI stock in the study though they are the factors that affect the amount of China's OFDI stock to certain extent. The paper concludes that China's OFDI to Africa are significantly related with a range of factors of energy resources, especially oil supply. The implication of research results is also discussed