Does Aid for Education Attract Foreign Investors? An Empirical Analysis for Latin America

Julian Donaubauer, Dierk Herzer and Peter Nunnenkamp

The European Journal of Development Research, 2014, vol. 26, issue 5, 597-613

Abstract: We address the question of whether foreign aid helps attract foreign direct investment (FDI). This could be achieved if well-targeted aid removed critical impediments to higher FDI inflows. In particular, we test the hypothesis that aid for education is an effective means to increase FDI flows to host countries in Latin America where schooling and education appear to be inadequate from the viewpoint of foreign investors. We employ panel data techniques covering 21 Latin American countries over the period from 1984 to 2008. We find that aid for education has a statistically significant positive effect on FDI. This effect is robust to potential outliers, sample selection within Latin America, alternative specifications and different estimation methods.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.palgrave-journals.com/ejdr/journal/v26/n5/pdf/ejdr201347a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/ejdr/journal/v26/n5/full/ejdr201347a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:eurjdr:v:26:y:2014:i:5:p:597-613

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/41287/PS2

Access Statistics for this article

The European Journal of Development Research is currently edited by Spencer Henson and Natalia Lorenzoni

More articles in The European Journal of Development Research from Palgrave Macmillan, European Association of Development Research and Training Institutes (EADI) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().