A REPUTATION DEFICIT? THE MYTHS AND REALITY OF CHINESE INVESTMENT IN ZAMBIA

Abstract

AbstractWhat drives public discontent about Chinese investment on the ground? This study probes the “ground truth” of public reaction in Zambia by documenting both the public perception and the actual impacts of Chinese investments. We find a “reputation deficit” for Chinese investment: Zambians are significantly less likely to support Chinese investment than investment from other countries. Combining results from an original household survey, interview records, and official statistics, we examine the drivers of this reputation deficit. Chinese firms are no worse at generating employment or adhering to labor and environmental standards than Western corporations operating in Zambia, according to official statistics as well as public opinion. However, Chinese firms possess a lower degree of localization, specifically in managers’ knowledge of local languages and the provision of culturally relevant benefits, and they are less likely to engage with the media. Our study highlights these previously overlooked causes of the reputation deficit.