Abstract
This empirical study has examined the impact of Chinese investments, namely infrastructure, energy, services, other investment sectors, and trade openness on the economies of the 25 Asian and North African countries along with the Belt and Road (B&R) Initiative for a period of 2007 to 2016 using the Johansen Fisher Panel Cointegration Test, Panel Dynamic Ordinary Least Squares (PDOLS) model, and the Toda and Yamamoto technique for testing causality. The findings revealed cointegration among the variables and that the impact of Chinese investments on economic growth in the host countries is positive, but it has a weaker effect, to a certain extent, in all sectors of the host countries while trade openness positively impacts the countries. Furthermore, there is evidence of a unidirectional causality between some FDI (foreign direct investment) economies while the investment in services and other sectors does not cause economic growth in the host countries. Based on the results, the paper proposes that the host countries increase the FDI in the sector of infrastructure, energy, and technology to enhance their economies.
Highlights
Foreign direct investment (FDI) is a cross-border investment by an occupant element in one economy to get an enduring interest in an enterprise’s inhabitance in another economy [1]
This examination analyzed the effect of Chinese investments in the infrastructure, energy, administrations, and investment in other sectors on economic development for a panel of the 25 Asian and North African nations along the Belt and Road (B&R) Initiative for a time of 2007 to 2016 utilizing the Johansen Fisher Panel Cointegration Test, Panel
The discoveries uncovered cointegration among the variables and that the effect of Chinese investments on economic development in the host nations is positive, it has a more fragile impact, partly in all sectors of the host nations, while exchange receptiveness positively affects the nations. This examination is not one-sided to the principal hypothesis, which expresses that FDI contributes impartially or decidedly to economic development, or the subsequent hypothesis which says that
Summary
Foreign direct investment (FDI) is a cross-border investment by an occupant element in one economy to get an enduring interest in an enterprise’s inhabitance in another economy [1]. FDI is recognized as an essential instrument for the development of worldwide capital streams. It is, one of the most applicable parts of the ongoing rush of globalization [2]. At present, attracting FDI is the top agenda for the emerging and developing economies. A striking element of the new globalization measure is the role played by multinational enterprises (MNEs) in creating work, development, profitability gains, and innovation moves, just as opening the door to superior reconciliation in global value chains [3]. Several researches have discovered that sustainable economic development improves the impact of FDI’s contingent on the host-nation environment [4]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
