Aid and Trade from a Donor's Perspective
AbstractAid is given for various purposes. Its impact on donors exports usually depends on whether it is given for altruistic reasons (to overcome human tragedies and disasters) or in an understanding to promote development (to finance infrastructure or social projects). As to humanitarian aid the impact of aid on donors exports will be most probably lower than in the latter case where related and unrelated imports for realizing development projects have been explicitly or implicitly agreed upon. Germany is known to be a country that ranks below average in tying its aid among the EU countries. Nonetheless there have been studies that found an extremely high positive impact of German bilateral aid on German exports. This finding will be re-examined in this study. An augmented gravity model is utilized to evaluate the impact of German bilateral aid on German exports. Stochastic and deterministic trends in the series are controlled to avoid spurious regression results. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Zurich 2008 with number 27.
Date of creation: 2008
Date of revision:
bilateral aid; donors exports; time series properties of panel data; ECM and DOLS estimation in a panel context;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F35 - International Economics - - International Finance - - - Foreign Aid
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
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