Illuminating Insights: The Impact of Chinese Infrastructure Projects on Economic Activities in Sub‐Saharan Africa

ABSTRACT This study investigates the impact of Chinese‐funded infrastructure projects on economic activities in sub‐Saharan Africa (SSA), focusing on both direct effects and spatial spillovers. Utilizing satellite‐based nighttime light intensity as a proxy for economic activity, the research analyzes data from 4385 second‐order administrative regions across 48 countries between 2012 and 2021. These geo‐coded projects, financed by the China Development Bank and the Export‐Import Bank of China, span sectors such as power, transportation, telecommunications, and water management. Employing various spatial econometric models, this study reveals that these infrastructure projects financed and co‐financed by the Chinese development financial institutions significantly boost local economic activities and generate positive spillovers in neighboring areas. By highlighting the spatial dynamics, this study provides an in‐depth but nuanced understanding of the localized economic benefits of these infrastructure projects at the second‐order administrative level, emphasizing the importance of regional coordination and integration to maximize these benefits. The findings support the global effort to enhance infrastructure development through diverse financing approaches, offering empirical evidence for the role of infrastructure development in reshaping the spatial distribution of economic activities. This study enriches existing literature on the effectiveness of development finance by focusing on microregional impacts and demonstrating the transformative potential of infrastructure projects in fostering regional economic development in SSA.