Elizabeth Asiedu is a Professor of Economics at the University of Kansas, and she was the Associate Department Chair and the Director of Graduate Studies from 2007-2009. She is also the President of the African Finance Economic Association and the President and founder of the Association for the Advancement of African Women Economists (AAAWE). Professor Asiedu received her B.S. (Hons) from the University of Ghana, M.S. in Mathematics from the University of Illinois at Urbana-Champaign (UIUC), and PhD in Economics also from UIUC.
This paper examines the interaction between foreign direct investment (FDI), natural resources and institutions. The paper answers three questions: (i) Do natural resources crowd out FDI - i.e., is there an FDI-natural resource curse?; (ii) Do institutions mitigate the adverse effect of natural resources on FDI? (iii) Can institutions completely neutralise the FDI-natural resource curse? Elizabeth Asiedu uses the systems GMM estimator proposed by Blundell and Bond (1998) to estimate a linear dynamic panel data model.
Foreign direct investment (FDI) is a good source of finance for long-term economic growth. It is especially important for its potential to transfer knowledge and technology, create jobs, boost overall productivity and enhance competitiveness in host countries. Many international development agencies, such as the World Bank, consider FDI as one of the most effective tools in the global fight against poverty, and therefore actively encourage poor countries to pursue policies that will encourage FDI flows.