Abstract
This study analyzes the relationship between agricultural foreign direct investment (FDI) and food security on Belt and Road Initiative (BRI) countries in a panel framework over the period 2006–2015 using correlation analysis, the specific-effect model, and the 2SLS technique. The study aims to: first, analyze the correlation between agricultural FDI and food security for each country, individually; then, investigate whether there is a direct relationship, using the specific-effect model. Finally, by taking one step further, this study uses the 2SLS method to determine whether there is an indirect relationship through agricultural productivity. Our results show that the sampled countries have clear differences in the direction of the relationship between food security and agricultural FDI. But, in general, the agricultural FDI has a positive direct and indirect effect on food security; this effect is seen clearly when the country attracts agricultural FDIs steadily.
Highlights
The world looks forward to achieving food security by 2030, but many countries still suffer from hunger and poverty, and lack the necessities of life
Along with many studies that refer to the positive effect of foreign direct investment (FDI) on host countries’ gross domestic product (GDP) [5,6,7], the World Bank predicted that FDI in Belt and Road Initiative (BRI) countries will increase the positive effect on GDP, trade, and employment, especially for the least developed countries [8]
By looking at our main results, we find that the Generalized Method of Moments (GMM) technique shows that the agricultural FDI has direct and indirect positive effects on food security, but that these effects are insignificant
Summary
The world looks forward to achieving food security by 2030, but many countries still suffer from hunger and poverty, and lack the necessities of life. This study spotlights the importance of agricultural foreign direct investment in achieving food security in BRI countries. This study aims to answer some questions that still need justifications in terms of the relationship between agricultural FDI and food security. Are there differences in the direction of the relationship between agricultural FDI and food security among BRI countries? This study contributes to the development of this literature in three ways It provides unique evidence from several BRI countries to validate the relationship between agricultural FDI and food security. It provides an inductive analysis: it starts from individual observations of each country, and moves to the general model, providing a more comprehensive picture of the relationship between agricultural FDI and food security.
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