Does Foreign Aid Impede Foreign Investment?

Authors

Reza Oladi, Utah State UniversityFollow
H. Beladi

Document Type

Article

Journal/Book Title/Conference

Frontiers of Econimics and Globalization: Theory and Practice of Foreign Aid 1

Volume

1

Editor

S. Lahiri

Publication Date

2007

Abstract

This paper investigates the impact of foreign aid on foreign investment when foreign aid is used to finance a public consumption good. By formulating and analyzing a three-good general equilibrium model, we show that such foreign aid could crowd out foreign investment, given a factor intensity condition.

Recommended Citation

“Does Foreign Aid Impede Foreign Investment?” (with H. Beladi), in: Lahiri, S. (eds), Frontiers of Economics and Globalization: Theory and Practice of Foreign Aid 1 (Invited volume series), 2007.