Aid-for-trade and export performance of developing countries

• Ghimire, Shankar ^[1] ; Mukherjee, Debasri ^[2] ; Alvi, Eskander ^[2]
  1. [1] Western Illinois University

     Western Illinois University

     Township of Macomb City, Estados Unidos

     
  2. [2] Western Michigan University

     Western Michigan University

     City of Kalamazoo, Estados Unidos

     
• Localización: Applied econometrics and international development, ISSN 1578-4487, Vol. 16, Nº. 1, 2016, págs. 23-34
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • This paper employs system-GMM technique to examine whether foreign-aid specifically targeted for trade promotion (Aid-for-Trade or AFT) helps aid-receiving countries improve their export performance, as measured by export level, export growth, and the change in export-GDP ratio. System-GMM is used to control for the underlying endogeneity problem as well as to capture dynamic behavior of the relation over time. We find positive and significant effect of AFT on multiple measures of export performance. However, the targeted aid is found to exhibit diminishing returns, thus reinforcing the idea of AFT’s important but limited role in the export promotion of aid recipients