Who cares about corruption in Africa? China or the USA?

Abstract

Considering the growing criticism by the USA of the bribery and corruption surrounding China's trade with Africa, this study uses panel data on 48 African countries over 17 years to examine whether the relationship between corruption and China's trade in Africa differs from that of USA–Africa trade relations. Contrary to expectations, we find that the relationship between corruption and trade with Africa is the same for both countries. Africa's trade with China and the USA increases as corruption increases. Our results imply that both countries have a similar trend of trading with African countries, and they might not care about corruption in Africa. Ultimately, both countries engage with Africa for their parochial economic and political interest. The results are robust to an alternative measure of corruption and endogeneity test using a two-stage least-square estimation technique.