alexa Does the Inflows of Foreign Aid Dampen or Stimulate FDI
ISSN: 2162-6359

International Journal of Economics & Management Sciences
Open Access

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Research Article

Does the Inflows of Foreign Aid Dampen or Stimulate FDI to EAC Members? Evidence From East African Community (EAC) Members

Masoud Mohammed Albiman*

Department Research Policy and Development, Zanzibar Revenue Board (ZRB) and Zanzibar Insitute of Business Research and Technology (ZIBRET), Tanzania, Zanzibar

*Corresponding Author:
Masoud Mohammed Albiman
Department Research Policy and Development
Zanzibar Revenue Board (ZRB) and
Zanzibar Insitute of Business Reseach
and Technology (ZIBRET), Tanzania, Zanzibar
Tel: +255242233904
E-mail: [email protected]

Received date: December 03, 2014; Accepted date: January 20, 2015; Published date: January 31, 2015

Citation: Albiman MM (2015) Does the Inflows of Foreign Aid Dampen or Stimulate FDI to EAC Members? Evidence From East African Community (EAC) Members. Int J Econ Manag Sci 4:228. doi:10.4172/2162-6359.1000228

Copyright: © 2015 Albiman MM. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

 

Abstract

Recently, the World Bank and IMF have been more interested in understanding whether foreign aid inflows from multilateral or bilateral donors have catalyzing effect on the crowd out effect to FDI. From this fact, the paper investigates the causal relationship between foreign aid, both bilateral and multilateral aid with FDI inflows to EAC members. Using time analysis techniques of VECM and Granger causality, the results are mixed. On one hand, foreign aid (bilateral and multilateral) causes FDI in two countries. On the other hand, we found no relationship between foreign aid and FDI in other two countries. The results calls for appropriate policy implementations.

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