Japanese aid as a prerequisite for FDI: the case of Southeast Asian countries
Résumé
This study investigates the nexus between Japanese aid and FDI in Southeast Asian countries. The sectoral decomposition of assistance programs attests that the needs of the recipient are taken into account but also that it is in keeping with a return on investment. Conditional logit analysis shows that aid had a positive impact on Japanese private investors’ location choice even though other profit-maximising factors had a leading spillover effect. In a context of growing scarcity of aid funding, we conclude by asserting the importance of a complementary process in which aid is directed towards the development of infrastructure, acting as a pre-requisite for future direct investments.