This paper examines the role financial markets play in the relationship between foreign direct investment (FDI) and … markets allow agents to take advantage of knowledge spillovers from FDI, magnifying the output effects of FDI. Empirically, we … show that well-developed financial markets allow significant gains from FDI, while FDI alone plays an ambiguous role in …

empirically that aid and FDI affect development very differently. Aid contributes powerfully to both economic growth and human … development, and the higher the level of human capital in a country, the more aid contributes. By contrast, FDI at best has no … that the degree of democratic responsiveness in government conditions the effectiveness of either aid or FDI, though we do …

resilience of real GDP per capita and net FDI inflows during periods of elevated financial stress. In addition, our results …