Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204992 
Year of Publication: 
2018
Series/Report no.: 
AGDI Working Paper No. WP/18/049
Publisher: 
African Governance and Development Institute (AGDI), Yaoundé
Abstract: 
This paper examines the effect of foreign aid in the terrorism-FDI nexus while considering the extent of domestic corruption-control (CC). The empirical evidence is based on a sample of 78 developing countries. The following findings are established: the negative effect of terrorism on FDI is apparent only in countries with higher levels of CC; foreign aid dampens the negative effect of terrorism on FDI only in countries with high levels of CC. The result is mixed when foreign aid is subdivided into its bilateral and multilateral components. Our findings are in accordance with the stance that bilateral aid is effective in reducing the adverse effect of terrorism on FDI. Multilateral aid also decreases the adverse effect of other forms of terrorism that can neither be classified as domestic nor as transnational. Policy implications are discussed.
Subjects: 
Conflict
Developing countries
Foreign investment
Foreign aid
Terrorism
JEL: 
D74
F21
F35
Document Type: 
Working Paper

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