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Infl ows of foreign knowledge are the key for developing countries to catch up with the world technology frontier. In this paper, I construct a simple tractable model to analyze (a) the incentives of foreign fi rms to bring their know-how to a developing country and (b) the incentives of...
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foreign direct investment (FDI). We then analyze how these relationships are affected by foreign aid flows. The analysis … focuses on 78 developing countries for 1984- 2008. Our findings suggest that all types of terrorism depress FDI. In addition …, aid mitigates the negative effects of total and domestic terrorism on FDI; however, this is not the case for transnational …
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