Does Foreign Aid Impede Foreign Investment?
Frontiers of Econimics and Globalization: Theory and Practice of Foreign Aid 1
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.
“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.