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

Author

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  • Sabrine Dhahri

    (University of Sfax)

  • Anis Omri

    (Qassim University
    Carthage University)

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.

Suggested Citation

  • Sabrine Dhahri & Anis Omri, 2020. "Are international capital flows really matter for achieving SDGs 1 and 2: ending poverty and hunger?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 731-767, November.
    • Handle: RePEc:spr:weltar:v:156:y:2020:i:4:d:10.1007_s10290-020-00376-0
    DOI: 10.1007/s10290-020-00376-0
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    2. Shastri, Shruti & Giri, A.K. & Mohapatra, Geetilaxmi, 2022. "Foreign capital inflows and poverty linkages in South Asia: Do the forms of capital inflows matter?," Economic Systems, Elsevier, vol. 46(3).
    3. Zhang, Liyunpeng & Zhuang, Yuhang & Ding, Yibing & Liu, Ziwei, 2023. "Infrastructure and poverty reduction: Assessing the dynamic impact of Chinese infrastructure investment in sub-Saharan Africa," Journal of Asian Economics, Elsevier, vol. 84(C).
    4. Danny Cassimon & Olusegun Fadare & George Mavrotas, 2023. "The Impact of Food Aid and Governance on Food and Nutrition Security in Sub-Saharan Africa," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    5. Berna Dogan, . "Does FDI in agriculture promote food security in developing countries? The role of land governance," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    6. Zhang, Liyunpeng & Li, Xiao & Zhuang, Yuhang & Li, Ningning, 2022. "World Bank aid and local multidimensional poverty in Sub-Saharan Africa," Economic Modelling, Elsevier, vol. 117(C).
    7. Zexian Gu & Xiaoqing Zhao & Pei Huang & Junwei Pu & Xinyu Shi & Yungang Li, 2023. "Identification of Multi-Dimensional Relative Poverty and Governance Path at the Village Scale in an Alpine-Gorge Region: A Case Study in Nujiang, China," IJERPH, MDPI, vol. 20(2), pages 1-19, January.

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    More about this item

    Keywords

    Poverty reduction; Food security; Foreign direct investment; Sectoral foreign aids;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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