Does Aid for Roads Attract Foreign or Domestic Firms? Evidence from Cambodia

Less developed countries have received substantial foreign aid for transport infrastructure, making its quantitative assessment important. To investigate the effect of aid for road infrastructure on the location of foreign and domestic firms, this study employs the first comprehensive census on all...

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Bibliographic Details
Published in:Developing economies 2013-12, Vol.51 (4), p.388-401
Main Authors: Tanaka, Kiyoyasu, Tsubota, Kenmei
Format: Article
Language:English
Subjects:
Business
Cambodia
Census
Count data
Developing countries
Economic assistance
Electric power
F21
F23
Foreign aid
Geographic distribution
Infrastructure
Labor supply
Labour supply
Location
Location of enterprises
O18
Population
Population density
R12
Road construction
Transport infrastructure
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Summary:Less developed countries have received substantial foreign aid for transport infrastructure, making its quantitative assessment important. To investigate the effect of aid for road infrastructure on the location of foreign and domestic firms, this study employs the first comprehensive census on all business establishments in Cambodia for 2011 and measures the geographical distribution of aid disbursements in roads. Estimating a negative binomial model, we find that aid disbursements in roads have little influence on the entry of foreign and domestic firms across communes. Compared with the aid effect, the location of firms is more strongly influenced by other determinants such as population size, electricity access, and labor supply.
ISSN:0012-1533
1746-1049
DOI:10.1111/deve.12027