| Title | The Impact of Chinese FDI in Africa: Evidence From Ethiopia |
| Date | October 13, 2020 (Tuesday) 16:30-18:00 |
| Location | via Zoom |
| Abstract | We exploit exogenous variation in China’ s export taxes to investigate the impact of Chinese foreign direct investment (FDI) in Ethiopia. Higher sector-specific export taxes in China lead to more Chinese FDI in Ethiopian districts specialized in those sectors. Combining this variation with the universe of FDI projects and the census of manufacturing firms in Ethiopia, we observe highly heterogeneous effects. Domestic firms competing with Chinese FDI reduce their sales, investment and inputs, as output prices drop. Firms operating in upstream and downstream sectors expand their sales, investment and inputs. To study the short and medium run aggregate impact of Chinese FDI on local economic activity, we build a 20-year district panel combining night lights data from two satellites through a machine-learning algorithm. Chinese FDI leads to no instantaneous impact on local growth, but significant and persistently positive effects in the medium run. |
| Paper | Paper Link |
| Slide | |
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