The Impact of Chinese Private odi in Africa

Abstract

This paper measures the boom of Chinese private investments in Africa. In attempting to explain the engagement of Chinese odi in Africa, this study uses the Uppsala model to better understand the motives behind the shift to the African Market. The findings suggest that Chinese private companies are not guided by the Uppsala model in their internationalization process in Africa. The remarkable advantage of Chinese private companies compared to other companies when moving to Africa is explained by their strong entrepreneurial spirit, risk taking and price leadership strategy. We find that political instability in African countries is not a big concern for Chinese companies. From the Chinese point of view, psychic distance is no longer an issue to worry about, as globalization plays a significant role in market integration. Chinese knowledge and experience pertaining to the African market is achieved by their operations in Africa, allowing Chinese companies to design their own way of internationalization in the African market.