Are international capital flows really matter for achieving SDGs 1 and 2: ending poverty and hunger?

Sabrine Dhahri () and Anis Omri ()
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Sabrine Dhahri: University of Sfax

Review of World Economics (Weltwirtschaftliches Archiv), 2020, vol. 156, issue 4, No 1, 767 pages

Abstract: Abstract This paper investigates the impact of foreign capital (foreign direct investment and foreign aid) on poverty reduction and food security in the case of 50 developing countries over the 1995–2015 period. Four types of foreign aids are included in the analysis, namely: social-infrastructure-aid (SIA), investment aid (IA), non-investment-aid (NIA), and agriculture-forestry-fishing-aid (AFFA). The following findings are obtained through the TOBIT estimations: (i) FDI has a positive impact on food security and poverty reduction, (ii) SIA and NIA have positive impacts on poverty reduction; however, the impacts of IA and AFFA on poverty reduction is insignificant, (iii) SIA, IA, and AFFA positively contribute to food security, and (iv) the impacts of FDI and foreign aids on food security and poverty reduction increases when they are working together, i.e., a great collaboration between FDI and aids will be more effective in reducing poverty and assuring food security in developing countries. This complementarity is also confirmed using the system Generalized Method of Moments method. Policy implications and future research directions are also discussed.

Keywords: Poverty reduction; Food security; Foreign direct investment; Sectoral foreign aids (search for similar items in EconPapers)
JEL-codes: F23 F35 I32 L66 Q10 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s10290-020-00376-0

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