This paper empirically examines the foreign aid-FDI nexus. There appears to be a notion asserting that foreign aid plays a catalytic role in stimulating private capital inflows. The attempt in this paper is to examine the possible catalytic or deterring effects of foreign aid on FDI inflows with reference to Sri Lanka. We estimate a dynamic time series model that is derived from an economic model of determinants of FDI. The results demonstrate that foreign aid has a dynamic positive effect on FDI inflows.
This new paperback edition of Foreign Direct Investment and Governments examines the dynamic relationship between foreign direct investment, governments and economic development. The book includes: * an investigation of the catalytic role played by the governments and multinationals in determining national advantages * eleven in-depth national studies of the UK, USA, Japan, New Zealand, India, Mexico, Spain, Sweden, China, Indonesia and Taiwan * analysis of all aspects of the investment development path Foreign Direct Investment and Governments is an excellent source book for students of international business.
Abstract: This thesis examines the impact of foreign aid on foreign direct investment (FDI) in Africa. Since there is no consensus in the literature regarding the effects of foreign aid on FDI in developing countries, the thesis examines the empirical relationship between foreign aid and FDI in Africa covering 41 African countries between 1995 and 2015. The analysis controls for market size, level of development, economic trade openness, political stability, and natural resources dependency. The model is estimated using a dynamic panel of System Generalized Method of Moments (GMM) estimation to address endogeneity problem. The model is applied to panel data compiled from publicly available databases. The results of this analysis show support of initial hypotheses that foreign aid can have positive impact on FDI. In addition, while recent studies tend to consider disaggregating aid sectors for infrastructure, and education among others, this thesis argues that aid function channels more impact on a country’s economy rather than being confined to targeted sectors. The results also indicate a significant positive impact associated with development aid channeled through multilaterals on FDI inflows. Consequently, governments’ policies to increase FDI must account for efficient utilization of foreign aid where as policies need to be developed not in isolation from each other. In addition, development partners should channel more funds through multilateral institutions to maximize the effectiveness of foreign aid.
In the 1990s, foreign direct investment began to swamp all other cross-border capital flows into developing countries. Does foreign direct investment support sound development? In particular, does it contribute to poverty reduction?
This Review assesses Ukraine’s investment climate vis-à-vis the country’s energy sector reforms and discusses challenges and opportunities in this context. Capitalising on the OECD Policy Framework for Investment and other relevant instruments and guidance, the Review takes a broad approach to investment climate challenges facing Ukraine’s energy sector.
The international flow of long-term private capital has increased dramatically in the 1990s. In fact, many policymakers now consider private foreign capital to be an essential resource for the acceleration of economic growth. This volume focuses attention on the microeconomic determinants and effects of foreign direct investment (FDI) in the East Asian region, allowing researchers to explore the overall structure of FDI, to offer case studies of individual countries, and to consider their insights, both general and particular, within the context of current economic theory.
This volume gathers the cutting edge of new research on foreign direct investment and host country economic performance, and presents the most sophisticated critiques of current and past inquiries. It presents new results, concludes with an analysis of the implications for contemporary policy debates, and proposed new avenues for future research.
This book presents original research that examines the growth of international investment agreements as a means to attract foreign direct investment (FDI) and considers how this affects the ability of capital-importing countries to pursue their development goals. The hope of countries signing such treaties is that foreign capital will accelerate transfers of technologies, create employment, and benefit the local economy through various types of linkages. But do international investment agreements in fact succeed in attracting foreign direct investment? And if so, are the sovereignty costs involved worth paying? In particular, are these costs such that they risk undermining the very purpose of attracting investors, which is to promote human development in the host country? This book uses both economic and legal analysis to answer these questions that have become central to discussions on the impact of economic globalization on human rights and human development. It explains the dangers of developing countries being tempted to 'signal' their willingness to attract investors by providing far-reaching protections to investors' rights that would annul, or at least seriously diminish, the benefits they have a right to expect from the arrival of FDI. It examines a variety of tools that could be used, by capital-exporting countries and by capital-importing countries alike, to ensure that FDI works for development, and that international investment agreements contribute to that end. This uniquely interdisciplinary study, located at the intersection of development economics, international investment law, and international human rights is written in an accessible language, and should attract the attention of anyone who cares about the role of private investment in supporting the efforts of poor countries to climb up the development ladder.
This study examines the link between FDI and development in six dynamic non-Member economies: Argentina, Brazil, Chile, Indonesia, Malaysia and the Philippines.
