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The Impact of Foreign Aid on Trade Imbalances of Sub-Saharan Africa

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  • Zenegnaw Abiy Hailu

Abstract

This study uses the Generalized Method of Moments (GMM) technique to determine the impact of Official Development Assistance (ODA) on trade balance of Sub-Saharan African countries, using annual data for the period 1980-2007. The result shows that ODA has positive effect on import and negative effect on export but are statistically insignificant. In the trade balance formulation, following its partial effect on export and import, it has a negative effect, but still statistically insignificant. Further study on the issue is justified, considering the specific mitigating factors, before coming to a final conclusion on the insignificant impact of ODA on balance of trade.

Suggested Citation

  • Zenegnaw Abiy Hailu, 2011. "The Impact of Foreign Aid on Trade Imbalances of Sub-Saharan Africa," The IUP Journal of Applied Economics, IUP Publications, vol. 0(3), pages 39-55, July.
    • Handle: RePEc:icf:icfjae:v:10:y:2011:i:3:p:39-55
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    Cited by:

    1. Kis, Katalin, 2017. "A Kelet-afrikai Közösség belső kereskedelmére ható tényezők [Factors determining the intra-regional trade of the East African Community]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 943-969.

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