On the link between Japanese ODA and FDI in China: a microeconomic evaluation using conditional logit analysis

Blaise, Séverine

doi:10.1080/0003684042000281534

Cited by 59 publications

(48 citation statements)

References 3 publications

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“…While Blaise (2005) …nds positive e¤ects of aid to infrastructure projects, Kimura and Todo (2007) …nd no positive infrastructure e¤ect, no negative rent-seeking e¤ect but a positive vanguard e¤ect (arising when foreign aid from a particular donor country promotes FDI from the same country but not from other countries).…”

Section: Literature Reviewmentioning

confidence: 99%

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Does Foreign Aid Increase Foreign Direct Investment?

Selaya

Sunesen²

2012

World Development

123

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The notion that foreign aid and foreign direct investment (FDI) are complementary sources of capital is conventional among governments and international cooperation agencies. This paper argues that the notion is incomplete. Within the framework of an open economy Solow model we show that the theoretical relationship between foreign aid and FDI is indeterminate. Aid may raise the marginal productivity of capital by …nancing complementary inputs, such as public infrastructure projects and human capital investment. However, aid may also crowd out productive private investments if it comes in the shape of physical capital transfers. We therefore turn to an empirical analysis of the relationship between FDI and disaggregated aid ‡ows. Our results strongly support the hypotheses that aid invested in complementary inputs draws in foreign capital while aid invested in physical capital crowds out FDI. The combined e¤ect of these two types of aid is small but on average positive.

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Section: Literature Reviewmentioning

confidence: 99%

“…4 Accordingly, in per capita terms, capital equipment can be …nanced by (i) domestic savings (S = sy, where s is a given savings rate), (ii) foreign direct investments (f di) and (iii) the in ‡ow of aid invested in physical capital (aid K ). Then capital accumulation per capita is given by…”

Section: A Theoretical Model Of Fdi and Aidmentioning

confidence: 99%

Does Foreign Aid Increase Foreign Direct Investment?

Selaya

Sunesen²

2012

World Development

123

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“…Hence, in this specific case, development aid seems to be more a substitute than a complement to FDI. Based on case studies on Japanese FDI and aid flows, Blaise (2005) finds that aid to infrastructure projects exerts a positive effect on FDI, while Kumura and Todo (2010) find no significant positive infrastructure impact, but rather a positive vanguard effect. Bhavan, Xu and Zhong (2011) show for South Asian countries that development aid drives FDI.…”

Section: Interaction Between Oda and Fdimentioning

confidence: 99%

Does Trade Openness Contribute to Driving Financing Flows for Development?

Brun¹,

Gnangnon²

2017

WTO Working Papers

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Trade has been recognized in the 2030 development Agenda as well as in the Addis Ababa Agenda for Action as an important means for the implementation of the Sustainable Development Goals (SDGs). This paper questions whether trade openness could be an important driver of financing for development flows, notably development aid (ODA), Foreign Direct Investment (FDI) inflows, and government public revenue, the latter being the ultimate financing source for development for any country. The paper also takes advantage of the framework of analysis to investigate the interplay between these three types of financial flows. Relying on an unbalanced panel dataset comprising 125 countries, of which 37 are Least Developed Countries (LDCs), the empirical analysis uses the three stage least squares econometric approach and provides two important pieces of evidence: first, international trade openness is an important tool for driving financial flows for development, including government public revenue, development aid and FDI. As a result, it could contribute to mobilizing the substantial financial resources needed for development, including for the implementation of the SDGs. Second, there are strong interactions (complementarity and substitutability) between these three types of financing for development flows.

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“…This model is established to explore the relationship between the performance of the international construction business of companies (from ODA donor countries) and the economic status of recipient countries. Blaise (2005) [1] conducted quantitative statistical analysis and determined that the ODA and Foreign Direct Investment (FDI) of donor countries are highly correlated. However, the policies and trends of public and private national infrastructure projects of the ODA recipient country-China in this study-are not considered.…”

Section: Previous Research On Oda and Its Effectsmentioning

confidence: 99%

“…Sector-specific aid has direct effects on foreign direct investment (FDI) and aid-financed infrastructure has provided higher preference to foreign investors than other aid [1,2]. From donor the perspective of donor countries, direct investment in recipient countries is a kind of reciprocal benefits situation, according to anticipation on improving their endowment with infrastructure in transportation, communication, energy, and finance.…”

Section: Introductionmentioning

confidence: 99%

Reciprocal Relations between Official Development Assistance Recipient and Donor Countries: Case of South Korean Overseas Construction Business and Southeast Asian Countries’ Economy

Lee

Kim

2017

Sustainability

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Abstract:In developing countries, official development assistance (ODA) is generally perceived to be an alternative means to develop infrastructure. Donor countries may expect benefits such as increased construction project orders in recipient countries. However, it remains arguable whether ODA contributes to reciprocal relations between recipient and donor countries. The case of South Korea can provide empirical data given that its government has expanded the amount of ODA to encourage overseas construction business while supporting Southeast Asian countries. In this research, gross national income (GNI), gross domestic product (GDP), foreign direct investment (FDI), and construction project orders awarded by South Korean construction companies in Vietnam, Bangladesh and Sri Lanka are analyzed according to the variation of ODA awarded by South Korea. The analysis results show that the influence of ODA upon economic situation of recipient countries varies according to their economic volume and development policy. From the donor country's perspective, enhanced performance of construction business can be expected by means of cooperation with local construction business.

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On the link between Japanese ODA and FDI in China: a microeconomic evaluation using conditional logit analysis

Cited by 59 publications

References 3 publications

Does Foreign Aid Increase Foreign Direct Investment?

Does Foreign Aid Increase Foreign Direct Investment?

Does Trade Openness Contribute to Driving Financing Flows for Development?

Reciprocal Relations between Official Development Assistance Recipient and Donor Countries: Case of South Korean Overseas Construction Business and Southeast Asian Countries’ Economy

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