Foreign aid, foreign direct investment and domestic investment nexus in landlocked economies of Central Asia
AbstractThis paper is about relationship between official development assistance, foreign direct investment and domestic investment in landlocked and less studied young economies of Central Asia. It is important for donor countries to understand whether their investments induce foreign direct investment or vise versa. If so, it creates ground for public-private partnership. If not, then it points of reassessing mechanisms of aid architecture. For public multinational enterprises is important to gain public opinion and further explore new markets. For governments it is crucial to devise policies to favor foreign transfers that bring better welfare improvements. Our results from seemingly unrelated regression for total regional sample demonstrate that (1) foreign aid and FDI are related. (2) we found crowding out effect: domestic investments decrease foreign aid inflows inelastically though. However, on country level these results are different. We conclude that there is an indication for public-private investment partnership.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 36881.
Date of creation: 29 Dec 2011
Date of revision: 23 Feb 2012
Central Asia; transition economies; foreign direct investment; official development assistance;
Other versions of this item:
- Annageldy Arazmuradov, 2012. "Foreign Aid, Foreign Direct Investment, and Domestic Investment Nexus in Landlocked Economies of Central Asia," The Economic Research Guardian, Weissberg Publishing, vol. 2(1), pages 129-151, May.
- F30 - International Economics - - International Finance - - - General
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-08 (All new papers)
- NEP-CWA-2012-03-08 (Central & Western Asia)
- NEP-DEV-2012-03-08 (Development)
- NEP-TRA-2012-03-08 (Transition Economics)
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