Foreign Aid, Resources and Export Diversification in Africa: A New Test of Existing Theories
AbstractRecent theoretical literature suggests that aid, geography, and resource endowments affect diversification of exports in Africa. This paper examines the validity of these popular views using a System-GMM methodology and panel data for African countries. The evidence suggests that aid, the quality of infrastructure, and resource endowments are robust determinants of diversification in Africa. It also suggests that there is no systematic relationship between geography and diversification. Furthermore, there is some evidence that institutional factors are important although it is not robust. Finally, the paper offers recommendations on how to promote export diversification in the region.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2228.
Date of creation: Mar 2007
Date of revision:
Exports; Aid; Diversification; Africa; Endowments;
Find related papers by JEL classification:
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F35 - International Economics - - International Finance - - - Foreign Aid
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