An Empirical Analysis of the Relation between Foreign Aid and Foreign Direct Investment: A Case Study on CLMV Countries

Official Development Assistance (ODA);foreign aid;Foreign Direct Investment (FDI);aid effectiveness;economic development;Panel Tobit analysis;350

행정대학원 행정학과 ;

University:서울대학교 행정대학원

关键词: Official Development Assistance (ODA);    foreign aid;    Foreign Direct Investment (FDI);    aid effectiveness;    economic development;    Panel Tobit analysis;    350;   

Others  :  http://s-space.snu.ac.kr/bitstream/10371/130177/1/000000132367.pdf

美国|英语

来源: Seoul National University Open Repository

【 摘 要 】

many of the studies find different answers on whether the foreign aid has the power to promote the foreign investment in the recipient countries.This study aims to examine whether foreign aid or ODA promotes FDI especially in CLMV countries. In particular, the study will test the hypothesis that bilateral aid is an effective means to increase FDI flows to host countries in aggregated and disaggregated sense. In this context, the study employs panel tobit estimation techniques on the panel data covering 18 donor countries providing aid in CLMV region over the period from 2000 to 2014.As a result, the study find that ODA has a statistically significant positive effect on FDI to host countries, in this case, in CLMV region. Individually, ODA allocated in Vietnam has a positive correlations to its FDI inflows. It was possible to believe that foreign aid in CLMV countries, especially in Vietnam, promotes FDI inflows therefore it assists the economic growth of the host country. In addition, aid for social infrastructure in CLMV region had a positive impact on FDI inflows of the countries. However, humanitarian aid and aid for multisector has crowding out effect on FDI inflows in Myanmar and Vietnam.