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Sectoral Aid-for-Trade and Sectoral Exports: A Seemingly Unrelated Regression Analysis


  • Shankar Ghimire

    () (Maryville College)

  • Debasri Mukherjee

    () (Western Michigan University)

  • Eskander Alvi

    () (Western Michigan University)


This paper examines the relation between foreign aid that is targeted for export promotion of specific sectors in developing countries and sector specific exports of those countries. Three major sectors are studied - agriculture, manufacturing, and service. A major component of this study is the compilation of sector-wise disaggregated aid-for-trade (AfT) measures for both committed aid and disbursed aid based on aid data and guidelines from OECD's Creditor Reporting System. Our response variable is sectoral exports and primary covariate is sectoral-AfT or SAfT, and since exports in one sector can be correlated with exports in other sectors within a country, a seemingly unrelated regression (SUR) framework is used to capture the interdependence among various sectors in an explicit way, producing efficient estimates. This study analyzes annual export level data of 121 AfT-recipient countries over a period of sixteen years (1995-2010) in the case of commitment aid data and over a period of nine years (2002-2010) in the case of disbursement aid data. The results show that the regression estimates corresponding to sectoral-AfT are positive and statistically significant for all sectors.

Suggested Citation

  • Shankar Ghimire & Debasri Mukherjee & Eskander Alvi, 2013. "Sectoral Aid-for-Trade and Sectoral Exports: A Seemingly Unrelated Regression Analysis," Economics Bulletin, AccessEcon, vol. 33(4), pages 2744-2755.
  • Handle: RePEc:ebl:ecbull:eb-13-00396

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    References listed on IDEAS

    1. Eskander Alvi & Debasri Mukherjee & Elias Kedir Shukralla, 2008. "Aid, Policies, and Growth in Developing Countries: A New Look at the Empirics," Southern Economic Journal, Southern Economic Association, vol. 74(3), pages 693-706, January.
    2. Jan Pettersson & Lars Johansson, 2013. "Aid, Aid for Trade, and bilateral trade: An empirical study," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(6), pages 866-894, September.
    3. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    4. Debasri Mukherjee & Elsy Thomas Kizhakethalackal, 2013. "Empirics of health-aid, education and infant mortality: a semiparametric study," Applied Economics, Taylor & Francis Journals, vol. 45(22), pages 3137-3150, August.
    5. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 239-253.
    6. 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, March.
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    Cited by:

    1. Shankar GHIMIRE & Debasri MUKHERJEE & Eskander ALVI, 2016. "Aid-for-Trade and Export Performance of Developing Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 16(1), pages 23-34.

    More about this item


    Aid-for-Trade; Sectoral Exports; Targeted Aid; Seemingly Unrelated Regression;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F3 - International Economics - - International Finance


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