Publication

In this paper, the question of whether foreign aid helps attract foreign direct investment (FDI) in Latin America is addressed. In particular, the authors test the hypothesis that aid for education is an effective means to increase FDI flows to host countries in Latin America where schooling and education appears to be inadequate from the viewpoint of foreign investors. To this end, panel data techniques covering 21 Latin American countries over the period from 1984 to 2008 are employed. The results suggest that aid for education has a statistically significant positive effect on FDI.