Book cover for Theory and Practice of Foreign Aid
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Frontiers of Economics and Globalization
Theory and Practice of Foreign Aid
Edited by
S. Lahiri
S. Lahiri
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Author and Other Information
Emerald Group Publishing Limited
Volume
1
DOI:
https://doi.org/10.1016/S1574-8715(2006)1
ISBN electronic:
978-1-84950-013-5
ISBN print:
978-0-44452-765-3
Series ISSN:
1574-8715
Publication date:
2006
Book Chapter

Chapter 4 Does Foreign Aid Impede Foreign Investment?

By
Hamid Beladi;
Hamid Beladi
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Reza Oladi
Reza Oladi
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Author and Other Information
Hamid Beladi
Reza Oladi
© Emerald Group Publishing Limited
2007
Doi:
https://doi.org/10.1016/S1574-8715(06)01004-9
  • Published:
    2006
© Emerald Group Publishing Limited
2007

This paper investigates the impact of foreign aid on foreign investment when foreign aid is used to finance a public consumption good. By formulating and analyzing a three-good general equilibrium model, we show that such foreign aid could crowd out foreign investment, given a factor intensity condition.

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