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Flowing Together or Flowing Apart: An Analysis of the Relation between FDI and ODA Flows to Argentina and Brazil

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  • Carro, Martha
  • Larrú, José María

Abstract

The analysis of the relationship between ODA and capital flows is scarce and has provided cross-country ambiguous results. The purpose of our study is to explore the relation between FDI and ODA for Argentina and Brazil. We have divided the analysis into the macro and the micro approach. From the macro perspective, we analyze the volatility and cyclical aspects of both flows. We also study if they buffer GDP’s shocks. We find that aid is more stable than FDI… At micro level, we look for structural relations by analyzing sectorial destination of both flows. We find that the main foreign direct investors are also the main donors but no systematic relation emerge between FDI and ODA flows, except for the Japanese case in Brazil.

Suggested Citation

  • Carro, Martha & Larrú, José María, 2010. "Flowing Together or Flowing Apart: An Analysis of the Relation between FDI and ODA Flows to Argentina and Brazil," MPRA Paper 25064, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25064
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    References listed on IDEAS

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    6. D. Tripati Rao & Narayan Sethi & Devi Prasad Dash & Padmaja Bhujabal, 2023. "Foreign Aid, FDI and Economic Growth in South-East Asia and South Asia," Global Business Review, International Management Institute, vol. 24(1), pages 31-47, February.
    7. Jeunghan Lee & Keuntae Cho, 2023. "Effects of Science, Technology, and Innovation Official Development Assistance on Foreign Direct Investment in Developing Countries," Sustainability, MDPI, vol. 15(16), pages 1-13, August.

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    More about this item

    Keywords

    Foreign Direct Investment; Official Development Assistance; International Capital Flows; Emerging Economies Financing;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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