EU Aid and Foreign Direct Investment - A Study of the Effectiveness of EU Sector ODA on FDI in Developing Countries
(2014) NEKH01 20142Department of Economics
- Abstract
- Research on aid is continuously exploring new channels to measure its effectiveness on economic development. The Millennium Development Goals have set the standard for aid policy-making and now, when facing deadline, its partakers have to set a new aid policy-agenda. The European Union is the largest donor of official development assistance (ODA), contributing a total of 50-60 percent of world ODA. Still the EU struggles with finding conclusive evidence of the effectiveness of aid. In the light of the above, this paper provides a panel data regression analysis of whether EU aid shows any short-term effect on foreign direct investments in developing countries and if so, if it is possible to distinguish what kind of EU aid is most effective... (More)
- Research on aid is continuously exploring new channels to measure its effectiveness on economic development. The Millennium Development Goals have set the standard for aid policy-making and now, when facing deadline, its partakers have to set a new aid policy-agenda. The European Union is the largest donor of official development assistance (ODA), contributing a total of 50-60 percent of world ODA. Still the EU struggles with finding conclusive evidence of the effectiveness of aid. In the light of the above, this paper provides a panel data regression analysis of whether EU aid shows any short-term effect on foreign direct investments in developing countries and if so, if it is possible to distinguish what kind of EU aid is most effective in doing so. ODA is subcategorized into three target sectors: economic infrastructure, production sectors and social infrastructure. The study takes its stand from FDI- and aid theory, relative developing countries and in the light of the EU. The effectiveness of EU ODA on FDI-inflows to developing countries is tested using a fixed effects OLS estimator and undergoes three sensitivity checks. The result shows that EU ODA has a positive statistical significant effect in promoting FDI and that a narrower approach is required to determine the sectorial effects respectively. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/4699382
- author
- Linder, Karin LU
- supervisor
- organization
- course
- NEKH01 20142
- year
- 2014
- type
- M2 - Bachelor Degree
- subject
- keywords
- ODA, FDI, EU, developing countries, panel data regression analysis
- language
- English
- id
- 4699382
- date added to LUP
- 2014-10-30 12:58:22
- date last changed
- 2014-10-30 12:58:22
@misc{4699382, abstract = {{Research on aid is continuously exploring new channels to measure its effectiveness on economic development. The Millennium Development Goals have set the standard for aid policy-making and now, when facing deadline, its partakers have to set a new aid policy-agenda. The European Union is the largest donor of official development assistance (ODA), contributing a total of 50-60 percent of world ODA. Still the EU struggles with finding conclusive evidence of the effectiveness of aid. In the light of the above, this paper provides a panel data regression analysis of whether EU aid shows any short-term effect on foreign direct investments in developing countries and if so, if it is possible to distinguish what kind of EU aid is most effective in doing so. ODA is subcategorized into three target sectors: economic infrastructure, production sectors and social infrastructure. The study takes its stand from FDI- and aid theory, relative developing countries and in the light of the EU. The effectiveness of EU ODA on FDI-inflows to developing countries is tested using a fixed effects OLS estimator and undergoes three sensitivity checks. The result shows that EU ODA has a positive statistical significant effect in promoting FDI and that a narrower approach is required to determine the sectorial effects respectively.}}, author = {{Linder, Karin}}, language = {{eng}}, note = {{Student Paper}}, title = {{EU Aid and Foreign Direct Investment - A Study of the Effectiveness of EU Sector ODA on FDI in Developing Countries}}, year = {{2014}}, }