SWFs tend to invest more in Africa. Using the Linaburg-Maduell transparency index for SWF transparency as control in column (2), we find our coefficient of interest, _α_ 2, remains positive and significant at the 1 percent level, while risk enters negatively and statistically significantly different from zero at the 1 percent level. In terms of networking variables, we find that the dummy variable political fund remains positive and significant at the 10 percent level, while the share of christians has a positive and significant effect on the investment share of SWFs in Africa at the 5 percent level. In column (3), we add the capitalization of SWFs in $ billion as a control. Our coefficient of interest, _α_ 2, remains positive and significant at the 5 percent level, while _α_ 3 remains negative but insignificant. This suggests that return rate increases SWF investments, while risk does not affect these investments. The coefficients associated with the dummy variable political fund, the share of christians and muslims, enter positively and statistically significantly different from zero at the 1 percent and 10 percent levels, respectively. These findings confirm our theoretical model and empirical strategy, and show that there are political and cultural biases for SWF investments in Africa. In column (4), we find an interesting result after controlling for the dummy variable called Islamic fund. The rate of return has a positive and significant effect on SWF investments, while risk exerts a negative and insignificant effect. We also find that SWF investments are politically biased since the coefficient of political fund remains positive and significant at the 1 percent level. Also, the coefficient associated with the share of christians enters positively and significantly different from zero at the 10 percent level. But the dummy variable Islamic fund enters negatively and insignificantly.

To take into account the level of financial development and bank efficiency of countries in Africa, we add private credit, overhead costs and cost to income ratio as controls in columns (5)-(8). The coefficients associated with the return rate and political fund remain positive and significant, while risk remains negative but is not significant. The share of christians remains positive and significant at the 10 percent level, while the share of muslims remains negative. This suggests that SWFs from christian countries tend to invest more in Africa but not for those from muslim countries. The introduction of bank efficiency measures confirms our results listed above. They suggest that the return rate enhances SWF investments, and political SWFs invest more in Africa. Surprisingly, the coefficient associated with bank cost to income ratio enters positively and statistically significantly different from zero at the 5 percent level. This suggests that SWFs tend to invest more in countries with less efficient banking systems, a finding in contraction with Turkisch (2011).

It could be that our results are driven by human capital. To control for this fact, we add school enrollment in column (1) as a control of Table 6. The coefficient associated with the return rate remains positive and significant at the 5 percent level, while risk remains negative and insignificant. Also, political fund remains positive and significant at the 1 percent level. As expected, human capital enhances SWF investments in Africa as the coefficient of school has a positive and significant effect on the share of investments at the 10 percent level. This suggests that SWFs tend to invest in African countries with good education system. We continue to check the robustness of our findings by adding inflation, macroeconomic policies such as budget balance, openness measured by trade, innovation captured by the proximity to the technology 16