| Summary: |
This thesis explores China's outward infrastructure investments in Africa through the lens of Frischmann's infrastructure theory, emphasising the role of infrastructure resources in generating economic value via positive externalities. Hence, the study evaluates the impacts of these investments across three key areas. First, it assesses how interactions between African firms and Chinese investors influence the performance of firms listed on African stock exchanges. Utilizing the Heckman two-stage selection model and the Average Treatment Effect analysis, the study reveals that while productivity spillovers are not always evident, these interactions significantly boost local firms' stock market valuations due to the signaling effect. Second, we examine the impact of these investments on the export activities of African nations, using a comprehensive industrial-level database covering fifty-four African countries. Employing the Heckman model and the Generalized Method of Moments, the results confirm an enhancement in export activities, particularly highlighting how Chinese state-owned enterprises' investments are driven by resource-seeking in primary industries and market-seeking in non-primary sectors. Third, we explore the influence of these infrastructure investments on African government borrowing, using Heckman's model and a machine learning algorithm to analyse potential debt-trap scenarios. Contrary to the prevalent debt-trap concerns, the study finds no evidence supporting this paradigm; instead, it suggests that commodity-based interactions might reduce Africa's debt burden. Overall, this comprehensive study contributes new insights into the dynamics of international infrastructure investments and their varied implications for African economic development.
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