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Foreign Aid and Export Performance: A Panel Data Analysis of Developing Countries

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Author Info
Jonathan Munemo (World Bank)
Subhayu Bandyopadhyay (Department of Economics, West Virginia University, and IZA, Bonn)
Arabinda Basistha (Department of Economics, West Virginia University)

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Abstract

The effect of foreign aid on economic activity of a country can be dampened as it can potentially have adverse effects on exports through a real exchange rate appreciation. In this study we examine the long-term relationship between export performance and foreign aid in developing countries while accounting for other factors. The estimates do not show negative effect of foreign aid on exports. The estimated coefficients are mostly positive but insignificant. The result is robust to use of two different export performance measures and different sub-samples.

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File URL: http://www.be.wvu.edu/div/econ//work/pdf_files/06-10.pdf
File Format: application/pdf
File Function: First version, July 2006
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Publisher Info
Paper provided by Department of Economics, West Virginia University in its series Working Papers with number 06-10.

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Length: 23 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:wvu:wpaper:06-10

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Related research
Keywords: Foreign aid; export performance; developing countries;

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  1. Badassa Tadasse & Bichaka Fayissa, 2009. "Determinants of the Allocation of US Aid forTrade," Working Papers 200901, Middle Tennessee State University, Department of Economics and Finance. [Downloadable!]
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