Asiedu, Elizabeth; Jin, Yi; Nandwa, Boaz - Department of Economics, University of Kansas - 2009
We construct a model of FDI, risk and aid, where a country loses access to FDI and aid if the country expropriates FDI … period 1983-2004. We ?nd that risk has a negative e¤ect on FDI, aid mitigates the adverse effect of risk on FDI, and that …. We show that: (i) The threat of expropri- ation leads to under-investment; (ii) The optimal level of FDI decreases as the …