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Aid and Trade - A Donor´s Perspective

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Author Info
Felicitas Nowak-Lehmann D. () (University of Goettingen / Germany)
Inmaculada Martínez-Zarzoso (University of Goettingen / Germany)
Stephan Klasen () (University of Goettingen / Germany)
Dierk Herzer () (Johann Wolfgang Goethe University, Frankfurt / Germany)

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Abstract

Foreign aid is given for a combination of economic, political, and humanitarian motives. While its impact on economic development in recipient countries has been the main focus of research recently, we concentrate on the question to what extent it also promotes donor countries’ exports. We examine this issue using Germany as a case study where the positive impact of aid on exports has been found to be extremely high. Using more advanced methods, we compute an average return (between EUR 1.49 to EUR 1.72) of one EUR of aid spent, well below previous findings, but still surprisingly large and robust.

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Publisher Info
Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 171.

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Length: 28 pages
Date of creation: 22 Apr 2008
Date of revision:
Handle: RePEc:got:iaidps:171

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Related research
Keywords: bilateral aid; donors’ exports; time series properties of panel data; ECM and DOLS estimation in a panel context;

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Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F35 - International Economics - - International Finance - - - Foreign Aid
C - Mathematical and Quantitative Methods

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Cited by:
(explanations, 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.)

  1. Inmaculada Martínez Zarzoso & Felictas Nowak-Lehmann D. & Stephan Klasen & Mario Larch, 2008. "Does German Development Aid Promote German Exports?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 170, Ibero-America Institute for Economic Research. [Downloadable!]
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