Advanced Search
MyIDEAS: Login

Does German Development Aid Promote German Exports?

Contents:

Author Info

Abstract

This paper uses a static and dynamic gravity model of trade to investigate the link between German development aid and exports from Germany to the recipient countries. The findings indicate that in the long run,German aid is associated with an increase in exports of goods that is larger than the aid flow, with a point estimate of 140 percent of the aid given. In addition, the evolution of the estimated coefficients over time shows an effect that is consistently positive but which oscillates over time. Interestingly, in the period from 2001 to 2005, a steady increase in the effect of aid on trade can be observed following a decrease in this phenomenon in the second half of the nineties. The paper also distinguishes among recipient countries and finds that the return on aid measured by German exports is higher for aid to countries considered “strategic aid recipients” by the German government.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://wwwuser.gwdg.de/~fjohann/paper/DB170.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 170.

as in new window
Length: 37 pages
Date of creation: 10 Apr 2008
Date of revision:
Handle: RePEc:got:iaidps:170

Contact details of provider:
Postal: Platz des Göttinger Sieben 3, 37073 Göttingen
Phone: 0049-551-39 81 72
Fax: 0049-551-39 81 73
Email:
Web page: http://www.iai.wiwi.uni-goettingen.de
More information through EDIRC

Related research

Keywords: International Trade; Foreign Aid; Germany;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  2. Berthelemy, Jean-Claude & Tichit, Ariane, 2004. "Bilateral donors' aid allocation decisions--a three-dimensional panel analysis," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 253-274.
  3. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  4. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
  5. Douglas Nelson & Simone Juhasz Silva, . "Does Aid Cause Trade? Evidence from an Asymmetric Gravity Model," Discussion Papers 08/21, University of Nottingham, GEP.
  6. J. N. Bhagwati & R. A. Brecher, 1979. "Foreign Ownership and the Theory of Trade and Welfare," Working papers 249, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Felicitas Nowak-Lehmann D. & Inmaculada Martinez-Zarzoso & Stephan Klasen & Dierk Herzer, 2009. "Aid and Trade - A Donor's Perspective," Journal of Development Studies, Taylor & Francis Journals, vol. 45(7), pages 1184-1202.
  8. Slobodan Djajic & Sajal Lahiri & Pascalis Raimondos-Moller, 2003. "Logic of aid in an intertemporal setting," IHEID Working Papers 06-2003, Economics Section, The Graduate Institute of International Studies.
  9. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
  10. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," Boston College Working Papers in Economics 667, Boston College Department of Economics, revised 05 Sep 2007.
  11. Jagdish Bhagwati & Richard Brecher & Tatsuo Hatta, 1984. "The paradoxes of immiserizing growth and donor-enriching “recipient-immiserizing” transfers: A tale of two literatures," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 120(2), pages 228-243, June.
  12. Gale, David, 1974. "Exchange equilibrium and coalitions : An example," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 63-66, March.
  13. Bhagwati, Jagdish N & Brecher, Richard A & Hatta, Tatsuo, 1983. "The Generalized Theory of Transfers and Welfare: Bilateral Transfers in a Multilateral World," American Economic Review, American Economic Association, vol. 73(4), pages 606-18, September.
  14. Fleck, Robert K. & Kilby, Christopher & Fleck, Robert K., 2001. "World Bank Independence: A Model and Statistical Analysis of U.S. Influence," Vassar College Department of Economics Working Paper Series 53, Vassar College Department of Economics.
  15. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  16. Bhargava, A & Franzini, L & Narendranathan, W, 1982. "Serial Correlation and the Fixed Effects Model," Review of Economic Studies, Wiley Blackwell, vol. 49(4), pages 533-49, October.
  17. Oliver Morrissey, 2006. "Aid or Trade, or Aid and Trade?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(1), pages 78-88, 03.
  18. Brecher, Richard A. & Bhagwati, Jagdish N., 1982. "Immiserizing transfers from abroad," Journal of International Economics, Elsevier, vol. 13(3-4), pages 353-364, November.
  19. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
  20. Mak Arvin & Bruce Cater & Saud Choudhry, 2000. "A causality analysis of untied foreign assistance and export performance: the case of Germany," Applied Economics Letters, Taylor & Francis Journals, vol. 7(5), pages 315-319.
  21. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Felicitas Nowak-Lehmann & Inmaculada Martínez-Zarzoso & Dierk Herzer & Stephan Klasen & Adriana Cardozo, 2013. "Does foreign aid promote recipient exports to donor countries?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(3), pages 505-535, September.
  2. Walter Krämer, 2011. "The cult of statistical significance. What economists should and should not do to make their data talk," Working Paper Series of the German Council for Social and Economic Data 176, German Council for Social and Economic Data (RatSWD).
  3. Felicitas Nowak-Lehmann D. & Inmaculada Martínez-Zarzoso & Stephan Klasen & Dierk Herzer, 2008. "Aid and Trade - A Donor´s Perspective," Ibero America Institute for Econ. Research (IAI) Discussion Papers 171, Ibero-America Institute for Economic Research.
  4. Badi H. Baltagi & Peter Egger & Michael Pfaffermayr, 2014. "Panel Data Gravity Models of International Trade," CESifo Working Paper Series 4616, CESifo Group Munich.
  5. Nowak-Lehmann D., Felicitas & Martínez-Zarzoso, Inmaculada & Cardozo, Adriana & Klasen, Stephan, 2010. "Foreign aid and recipient countries' exports: How important are improved bilateral trade relations?," Proceedings of the German Development Economics Conference, Hannover 2010 44, Verein für Socialpolitik, Research Committee Development Economics.
  6. Oxana Babecká Kucharčuková & Jan Babecký & Martin Raiser, 2012. "Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Open Economies Review, Springer, vol. 23(2), pages 277-301, April.
  7. Philipp Hühne & Birgit Meyer & Peter Nunnenkamp, 2013. "Who Benefits from Aid for Trade? Comparing the Effects on Recipient versus Donor Exports," Kiel Working Papers 1852, Kiel Institute for the World Economy.
  8. Walter Kraemer, 2010. "The Cult of Statistical Significance," CESifo Working Paper Series 3246, CESifo Group Munich.
  9. Oxana Babecka Kucharcukova & Jan Babecky & Martin Raiser, 2010. "A Gravity Approach to Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Working Papers 2010/04, Czech National Bank, Research Department.
  10. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D. & Stephan Klasen & Florian Johannsen, 2013. "Does German Development Aid Promote German Exports and German Employment? A Sectoral-Level Analysis," Ibero America Institute for Econ. Research (IAI) Discussion Papers 227, Ibero-America Institute for Economic Research, revised 18 Dec 2013.
  11. Walter Krämer, 2012. "Das Signifikanztest-Ritual und andere Sackgassen des Fortschritts in der Statistik," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 5(4), pages 299-308, March.
  12. Macias, Jose Brambila & Massa, Isabella & Salois, Matthew J., 2010. "The Impact of Financial Crises on Trade Flows: A Developing Country Perspective," 84th Annual Conference, March 29-31, 2010, Edinburgh, Scotland 91831, Agricultural Economics Society.
  13. Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas & Klasen, Stephan, 2010. "The Economic Benefits of giving Aid in terms of Donors Exports," Proceedings of the German Development Economics Conference, Hannover 2010 28, Verein für Socialpolitik, Research Committee Development Economics.
  14. Konstantin M. Wacker, 2011. "Do multinationals beat down developing countries' export prices? The impact of FDI on net barter terms of trade," Ibero America Institute for Econ. Research (IAI) Discussion Papers 211, Ibero-America Institute for Economic Research.
  15. Wacker, Konstantin M. & Großkurth, Philipp & Lakemann, Tabea, 2014. "Terms of Trade, Foreign Direct Investment, and Development: A Case of Intra-Asian “Kicking Away the Ladder”?," Working Papers on Regional Economic Integration 122, Asian Development Bank.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:got:iaidps:170. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Jaep).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.