An Empirical Study Of China’s Aid To Africa Affect China’s Outward Foreign Direct Investment

Since the implementation of the strategy of "going out", China’s Outward Foreign Direct Investment developed quickly. The number of investment and scale continues to rise. Particularly, the outward foreign direct investment to Africa develops rapid. A large number of literatures attempted to research the factors which impact China’s direct investment in Africa, but aid factors is easy to be ignored. China’s aid to Africa began in 1956 and has a long history. So how the aid affects the direct investment? Considering the distribution of China’s OFDI to Africa is unbalanced, the study attempts to explore the influence of aid from the point of OFDI differentiation. The study explores the mechanism how the aid influences China’s OFDI. This provide theoretical reference and empirical basis for the future development of our country’s foreign aid and foreign investment.The literatures which researched the aid to Africa affecting China’s OFDI is relatively scarce. The study summarizes the former research and based on the unbalanced distribution of the China’s outward direct investment to Africa. And this study uses the method of quantile regression to prove the influence of aid on OFID. Based on the panel data model of African countries, the paper reveals that China’s development aid can promote Chinese outward foreign direct investment. And in the countries with less stocks of outward foreign direct investment, the effect is more obvious. In order to get a robuster result, the paper used the flow data to replace the stock data and also use the method of GMM replace the quantile regression to inspect the conclusion. The final conclusion is consistent with the above.The conclusion showed that China’s development aid to African countries will be conducive to China’s OFDI, especially for the countries with less stocks of outward foreign direct investment, the effect of aid is better. It can drive the enterprise of China go out to invest. As the scale of Chinese OFDI in African countries widening gradually, the aid’s effect to OFDI presents a downward trend. Under the background of the current international economy, it should combine foreign aid and foreign investment policies and promote the coordination development of foreign aid and foreign investment. These policies are feasible and should be chosen.