ADAPTED fellow and PhD candidate Muhammad Saleh has made available preprint versions of two research articles which form part of this dissertation in the context of the ADAPTED project. Both articles can be freely accessed on the reseach repository SSRN.
The first article titled "Flying Dragon in the Eagle's Sky: Is Chinese and US Aid a Vanguard of their FDI Flows to the Developing World?" compares China and the United States as bilateral donors and global competitors to examine the existence of a 'vanguard effect' in their aid and FDI flows to developing world. It introduces an aid identification model treating aid allocation as a simultaneous optimization problem, considering the perceived costs and benefits for both donors and recipients. Muhammad's findings suggest recipient countries may face a trade-off between the Eagle and the Dragon: attracting U.S. FDI may require openness, stronger institutions, and export growth, while courting Chinese FDI in the presence of Chinese aid could come at the expense of these very factors.
Saleh, M. (2025): Flying Dragon in the Eagle's Sky: Is Chinese and US Aid a Vanguard of their FDI Flows to the Developing World?: https://dx.doi.org/10.2139/ssrn.5341210.
The second article is titled "Does Foreign Aid Create Jobs in Developing World? A Sub-national Analysis of World Bank Aid and Firm Level Employment" and investigates the impact of WB project aid on ‘modern sector’ firm level job creation (for both permanent and temporary employed workers) in the developing world. In this paper, Muhammad addresses the spatial causality concern by geospatial mapping of the WB project level assistance in 60 developing countries with respective firm level enterprise surveys data. The paper estimates whether the lagged WB aid disbursed in a given state or province significantly explains variations observed in firm level employment within the same geographical region and tests for firm level capital investments and access to finance, among others, as potential transmission channels for explaining observed impact of aid on employment. Muhammad finds evidence in favor of positively significant association of WB aid disbursements with the firm level employment.
Saleh, M. (2025): Does Foreign Aid Create Jobs in Developing World? A Sub-national Analysis of World Bank Aid and Firm Level Employment: https://dx.doi.org/10.2139/ssrn.5341241.