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Aid for trade and export diversification in recipient‐countries

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  • Sèna Kimm Gnangnon

Abstract

The Aid‐for‐Trade (AfT) Initiative was launched by the Members of the World Trade Organization (WTO) with a view to helping developing countries and the least‐developed countries (LDCs) expand their trade. The current paper contributes to the literature on AfT effectiveness by examining how AfT affects recipient‐countries' export product diversification. The analysis has been carried out on a sample of 104 AfT recipient‐countries over the period 2002–2015 and uses the two‐step system generalised methods of moments (GMM) approach. Results show that AfT flows are conducive to export product diversification in recipient‐countries. In addition, the analysis has shown a positive impact of the cumulative AfT flows on the export product diversification path of these countries. These results apply as well to the subsamples of LDCs and other developing countries. One policy implication of these results is that a scale‐up of AfT would help recipient‐countries to diversify their export products baskets and hence facilitate their greater integration into the global trading system.

Suggested Citation

  • Sèna Kimm Gnangnon, 2019. "Aid for trade and export diversification in recipient‐countries," The World Economy, Wiley Blackwell, vol. 42(2), pages 396-418, February.
    • Handle: RePEc:bla:worlde:v:42:y:2019:i:2:p:396-418
    DOI: 10.1111/twec.12711
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    Cited by:

    1. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Poverty Reduction in Recipient-Countries," EconStor Preprints 213807, ZBW - Leibniz Information Centre for Economics.
    2. Gnangnon, Sèna Kimm, 2022. "Effect of Aid for Trade flows on the Accession to the World Trade Organization," EconStor Preprints 261331, ZBW - Leibniz Information Centre for Economics.
    3. Gnangnon, Sèna Kimm, 2023. "The Quality of Aid for Trade Flows and Economic Complexity," EconStor Preprints 271538, ZBW - Leibniz Information Centre for Economics.
    4. Gnangnon, Sèna Kimm, 2020. "Aid for Trade and Services Export Diversification in Recipient-Countries," EconStor Preprints 210467, ZBW - Leibniz Information Centre for Economics.
    5. Gnangnon, Sèna Kimm, 2022. "Effect of the utilization of non-reciprocal trade preferences offered by the QUAD countries on beneficiary countries' economic complexity," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    6. Sèna Kimm Gnangnon, 2022. "Aid for Trade, export product diversification, and foreign direct investment," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 534-561, February.
    7. Sèna K. Gnangnon, 2021. "Aid for Trade and services export diversification in recipient countries," Australian Economic Papers, Wiley Blackwell, vol. 60(2), pages 189-225, June.
    8. Sèna Kimm Gnangnon, 2021. "Development aid and services export diversification," International Journal of Economic Policy Studies, Springer, vol. 15(1), pages 125-156, February.
    9. Mohammed Shakib, 2023. "Innovation-Export Diversification Nexus in Russian Regions: Does Trade Globalization, Business Potential and Geopolitics Matter?," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(4), pages 932-974.
    10. Sena Kimm Gnangnon, 2020. "A Note on the Algebra of Multiple Exchange Rates," Economics Bulletin, AccessEcon, vol. 40(1), pages 316-337.
    11. Gnangnon, Sèna Kimm, 2020. "Aid for Trade, Export Product Diversification and Import Product Diversification," EconStor Preprints 223021, ZBW - Leibniz Information Centre for Economics.
    12. Sana Sardar & Dilawar Khan & Alam Khan & Róbert Magda, 2022. "The Influence of Aid for Trade on Human Development in South Asia," Sustainability, MDPI, vol. 14(19), pages 1-12, September.
    13. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Wage Inequality in the manufacturing sector of recipient-countries," EconStor Preprints 213936, ZBW - Leibniz Information Centre for Economics.
    14. Sèna Kimm Gnangnon, 2021. "Aid for trade and inflation: Exploring the trade openness, export product diversification and foreign direct investment channels," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 563-593, December.
    15. Sèna Kimm Gnangnon, 2020. "Effect of Aid for Trade Unpredictability on Trade Policy in Recipient-Countries," Arthaniti: Journal of Economic Theory and Practice, , vol. 19(2), pages 177-203, December.
    16. JunYun Kim & Hongshik Lee & Joonhyung Lee, 2022. "Does Aid for Trade Promote Vertical Specialization?," Asian Economic Journal, East Asian Economic Association, vol. 36(2), pages 127-158, June.
    17. Gnangnon, Sèna Kimm, 2023. "Do Aid for Trade flows affect Technology Licensing in Recipient Countries?," EconStor Preprints 273419, ZBW - Leibniz Information Centre for Economics.
    18. Dung Ly‐My & Hyun‐Hoon Lee & Donghyun Park, 2021. "Does aid for trade promote import diversification?," The World Economy, Wiley Blackwell, vol. 44(6), pages 1740-1769, June.
    19. Stender, Frederik & Vogel, Tim, 2023. "What role for aid for trade in (deep) PTA relations? Empirical evidence from gravity model estimations," IDOS Discussion Papers 13/2023, German Institute of Development and Sustainability (IDOS).
    20. Dung Ly-My & Hyun-Hoon Lee & Fahad Khan, 2022. "Does aid for trade contribute to M&A FDI flows to developing countries?," Empirical Economics, Springer, vol. 63(2), pages 697-723, August.
    21. Sèna Kimm Gnangnon, 2020. "Comparative Advantage Following (CAF) development strategy, Aid for Trade flows and structural change in production," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-29, December.
    22. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.

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