Investigating the Impact of Chinese Financing on Productivity in the African Continent
By Kedest Mathewos
Given that productivity is a key component of long-term economic growth and that China has become an important source of external financing in Africa, this study aims to investigate the impact of Chinese foreign direct investment and government-to-government loans on productivity. Using a panel of the top fourteen African recipients of Chinese financing during the period 2003-2017, this study employs a two-stage regression process. The first relies on the use of a revised version of the Solow Model that accounts for human capital, natural resource accumulation and country-specific heterogeneity, to generate values of total factor productivity. The second examines the impact of Chinese financing on this generated measure of productivity. After taking into account significant confounding variables such as institutional quality, trade openness and manufacturing value-added, this study finds that Chinese foreign direct investment (FDI) has a significant negative impact on productivity while Chinese government loans are positively associated with productivity. However, consistent with the literature, the impact of Chinese FDI depends on the country’s absorptive capacity – proxied here by the level of human capital accumulation. Therefore, as African countries seek to boost productivity levels, they should continue to attract Chinese government loans while enhancing their FDI absorptive capacity.
Advisors: Professor Lori Leachman, Professor Grace Kim, Professor Kent Kimbrough| JEL Codes: O4, O47, F21
Asylum Determination within the European Union (EU): Whether Capacity and Social Constraints Impact the Likelihood of Refugee Status Determination
By Louden Paul Richason
This paper analyzes whether capacity and social constraints impact acceptance rates for asylum seekers in the European Union from 2000-2016. Theoretically people should receive asylum based on the criteria outlined in international law – a well founded fear of persecution – but the influx and distribution of applicants in the European Union suggests that this may not hold in practice. For a group of pre identified “legitimate” asylum cases, this paper finds that surges in applications in a country (i.e. capacity constraints) have a positive and statistically significant correlation with acceptance rates, while the percentage of migrants in a country (i.e. social constraints) has a negative and statistically significant correlation with acceptance rates. This suggests that the burden of proof becomes easier during a surge in total applications in a country. However, as the international migrant stock in that country increases, it is more difficult for that same group of applicants to receive asylum.
Advisors: Professor Suzanne Shanahan, Professor Michelle Connolly | JEL Codes: D73, D78, F22, H12, J11, J15, K37, O52
