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The Role of Sectoral FDI in Promoting Agricultural Production and Improving Food Security

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  • Mehdi Ben Slimane
  • Marilyne Huchet-Bourdon
  • Habib Zitouna

Abstract

The aim of this paper is to examine the effects of foreign direct investments (FDI) on food security for 55 developing countries in a panel framework over the period 1995–2009. There are various measures of food security that can be used. Our first contribution is to build a composite indicator that synthesizes the food indicators used by the Food and Agriculture Organization to measure the food availability and food utilization. Second, our empirical study is based on a model composed of a food security equation and an agricultural production equation. Our results show that sectoral FDI have different effects on food security. FDI in the agriculture sector improves food security and FDI in the secondary and tertiary sector increases the food insecurity. We found a significant FDI?s spillover through the agricultural production to food security. While the effect is positive with FDI in secondary sector, it is negative for FDI in the tertiary sector.

Suggested Citation

  • Mehdi Ben Slimane & Marilyne Huchet-Bourdon & Habib Zitouna, 2016. "The Role of Sectoral FDI in Promoting Agricultural Production and Improving Food Security," International Economics, CEPII research center, issue 145, pages 50-65.
    • Handle: RePEc:cii:cepiie:2016-q1-145-5
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    9. Kamenya, Madalitso A., 2020. "The impact of public agricultural investment on food security and nutrition in ECOWAS," Research Theses 334764, Collaborative Masters Program in Agricultural and Applied Economics.
    10. Sabrine Dhahri & Anis Omri, 2020. "Does foreign capital really matter for the host country agricultural production? Evidence from developing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(1), pages 153-181, February.
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    14. Adom, Philip Kofi & Adams, Samuel, 2020. "Decomposition of technical efficiency in agricultural production in Africa into transient and persistent technical efficiency under heterogeneous technologies," World Development, Elsevier, vol. 129(C).
    15. Kastratovic, Radovan, 2019. "Impact of foreign direct investment on greenhouse gas emissions in agriculture of developing countries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(3), July.
    16. Isaac Doku & Andrew Phiri, 2022. "Climate finance and hunger among non-annex-1 parties: a lens on Sub-Saharan Africa," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 14(4), pages 380-398.
    17. Kasililika-Mlagha, Emmillian Chifundo, 2021. "The impact of public agriculture expenditure on food security and nutrition in the Southern African Development Community (SADC)," Research Theses 334749, Collaborative Masters Program in Agricultural and Applied Economics.
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    19. Kamenya, Madalitso A. & Hendriks, Sheryl L. & Gandidzanwa, Colleta & Ulimwengu, John & Odjo, Sunday, 2022. "Public agriculture investment and food security in ECOWAS," Food Policy, Elsevier, vol. 113(C).
    20. Furqan Sikandar & Vasilii Erokhin & Hongshu Wang & Shafiqur Rehman & Anna Ivolga, 2021. "The Impact of Foreign Capital Inflows on Agriculture Development and Poverty Reduction: Panel Data Analysis for Developing Countries," Sustainability, MDPI, vol. 13(6), pages 1-22, March.
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    More about this item

    Keywords

    Food security; FDI; Agricultural production; Developing countries;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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