Local Skill Development from China’s Engagement in Africa: Comparative Evidence from the Construction Sector in Ghana

Abstract

Over the past decade, Chinese enterprises have made significant progress in developing new business ventures in Africa. There is ongoing debate whether these Chinese enterprises contribute to local skill development in their host countries. We utilize unique survey data from the construction sector in Ghana to examine the heterogeneity in skill transfer to local workers in Chinese-owned, other foreign, and domestic enterprises. First, our analyses illustrate that there are no significant differences in the characteristics of local employees from Chinese enterprises and those from other enterprises in terms of age, marital status, education background, work experience, and union membership. In terms of employment attributes, while workers in other enterprises on average stay longer with their employers than those working for Chinese enterprises, statistically, we do not observe any significant difference in the share of workers that receive training between Chinese and other construction enterprises. Furthermore, regression estimates suggest that compared to local enterprises, both Chinese and other foreign enterprises contribute positively to short-term general training and long-term specific training of locally hired workers. Indeed, the likelihood of receiving training, especially short-term general training, is higher for Chinese enterprise employees than those of other foreign enterprises.