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

Author

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  • Shankar Ghimire

    (Maryville College)

  • Debasri Mukherjee

    (Western Michigan University)

  • Eskander Alvi

    (Western Michigan University)

Abstract

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

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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.
    2. S K Gnangnon, 2023. "Effect of Aid for Trade on Financial Development," Economic Issues Journal Articles, Economic Issues, vol. 28(2), pages 1-38, September.
    3. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Wage Inequality in the manufacturing sector of recipient-countries," EconStor Preprints 213936, ZBW - Leibniz Information Centre for Economics.
    4. Güzin Bayar, 2018. "Estimating export equations: a survey of the literature," Empirical Economics, Springer, vol. 54(2), pages 629-672, March.
    5. Sèna K. Gnangnon, 2021. "Aid for Trade and services export diversification in recipient countries," Australian Economic Papers, Wiley Blackwell, vol. 60(2), pages 189-225, June.
    6. Sèna Kimm Gnangnon, 2024. "The least developed countries' Services Waiver, Aid for Trade for services and services exports," The World Economy, Wiley Blackwell, vol. 47(4), pages 1495-1530, April.
    7. Sèna Kimm Gnangnon, 2020. "Comparative Advantage Following (CAF) development strategy, Aid for Trade flows and structural change in production," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-29, December.
    8. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.

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    JEL classification:

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

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