Explaining Chinese FDI in Africa: a longitudinal configurational approach integrating policy influences to traditional FDI motivations

Trump's re-election reshaped US geopolitics and trade policy, with significant implications for Foreign Direct Investment (FDI), particularly from state-driven economies like China. Understanding how Chinese policy shapes FDI in geopolitically sensitive regions like Africa is crucial. This paper examines the interplay between traditional FDI motivations and policy influences driving FDI presence or absence in Africa. Adopting configurational theorising, we employ longitudinal, panel fuzzy-set Qualitative Comparative Analysis (fsQCA) across 46 African countries from 2012 to 2018. We find that policy/ political influences are integral to Chinese-FDI motivations. They consistently enable, accommodate, and complement traditional FDI motivations, reducing Multinational Enterprises (MNEs)’ risks and entry barriers, while fostering China’s long-term control over critical markets and resources. For Chinese-FDI combinations of motivations (pathways) drive FDI. The changes in pathways’ strength and geographical coverage are shaped by the presence of political influence and potentially reflect shifts in Chinese political priorities. We contribute to internalisation theory and OLI by integrating policy/ political drivers into location advantages to explain FDI-motivations. We showcase how Chinese MNEs utilise their ownership advantages to exploit non-market and institutional imperfections towards creating internationally transferable location advantages, thereby supporting Chinese MNEs and implementing Chinese policy. The longitudinal fsQCA approach to analyse complex, evolving FDI motivations provides new insights into Chinese FDI in Africa. By addressing the nuanced role of economic diplomacy and the Chinese competitive state system, we offer practical implications for policymakers and managers aiming to attract and equitably manage Chinese-FDI, and to predict the future FDI location decisions of China to proactively manage their economic and geopolitical implications.