IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v22y2013i6p866-894.html
   My bibliography  Save this article

Aid, Aid for Trade, and bilateral trade: An empirical study

Author

Listed:
  • Jan Pettersson
  • Lars Johansson

Abstract

In a gravity model for 184 countries between 1990 and 2005, we show that bilateral aid is not only positively correlated with donor exports, as suggested in earlier studies, but also positively associated with recipient exports to donors. Our interpretation is that an intensified aid relation reduces the effective cost of distance. We find a particularly strong effect of aid in the form of technical assistance. The effect of trade-related assistance (Aid for Trade) is small and fully accounted for by aid to investments in trade-related infrastructure. The aid-trade link is particularly strong for donor exports to Sub-Saharan African countries and for recipient exports of strategic materials.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:jitecd:v:22:y:2013:i:6:p:866-894
    DOI: 10.1080/09638199.2011.613998
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09638199.2011.613998
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638199.2011.613998?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dazoue Dongue Guy Paulin & Nemb Pierre Samuel & Abessolo Yves André, 2017. "Influence of Bilateral Aid on Cameroon's Bilateral Trade Performance with Respect to OECD Donor Countries," EuroEconomica, Danubius University of Galati, issue 2(36), pages 169-178, November.
    2. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D. & Stephan Klasen & Florian Johannsen, 2013. "Does German Development Aid Promote German Exports and German Employment? A Sectoral-Level Analysis," Ibero America Institute for Econ. Research (IAI) Discussion Papers 227, Ibero-America Institute for Economic Research, revised 18 Dec 2013.
    3. Jean-Louis COMBES & Rasmané OUEDRAOGO, 2014. "Does Pro-cyclical Aid Lead to Pro-cyclical Fiscal Policy? An Empirical Analysis for Sub-Saharan Africa," Working Papers 201424, CERDI.
    4. Stender, Frederik & Vogel, Tim, 2023. "What role for aid for trade in (deep) PTA relations? Empirical evidence from gravity model estimations," IDOS Discussion Papers 13/2023, German Institute of Development and Sustainability (IDOS).
    5. Hendrik W. Kruse & Inmaculada Martínez‐Zarzoso, 2021. "Transfers in the gravity equation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 410-442, February.
    6. Philipp H�hne & Birgit Meyer & Peter Nunnenkamp, 2014. "Who Benefits from Aid for Trade? Comparing the Effects on Recipient versus Donor Exports," Journal of Development Studies, Taylor & Francis Journals, vol. 50(9), pages 1275-1288, September.
    7. Bernard Hoekman & Anirudh Shingal, 2020. "Aid for trade and international transactions in goods and services," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 320-340, May.
    8. Liu, Ailan & Tang, Bo, 2018. "US and China aid to Africa: Impact on the donor-recipient trade relations," China Economic Review, Elsevier, vol. 48(C), pages 46-65.
    9. Dang Luu Hai, 2021. "Aid for trade and export sophistication in recipient countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(4), pages 530-548, May.
    10. Kruse, Hendrik W. & Martínez-Zarzoso, Inma, 2016. "Transfers in the gravity equation: The case of foreign aid," University of Göttingen Working Papers in Economics 288, University of Goettingen, Department of Economics.
    11. Barthel, Fabian & Neumayer, Eric & Nunnenkamp, Peter & Selaya, Pablo, 2014. "Competition for Export Markets and the Allocation of Foreign Aid: The Role of Spatial Dependence among Donor Countries," World Development, Elsevier, vol. 64(C), pages 350-365.
    12. Abiola Abidemi Akinsanya, 2020. "Understanding the Role of Aid for Trade in Enhancing Corridor Development and Regional Integration in West Africa: Lessons and Policy Directions," Advances in African Economic, Social and Political Development, in: Gbadebo O.A. Odularu & Mena Hassan & Musibau Adetunji Babatunde (ed.), Fostering Trade in Africa, pages 183-211, Springer.
    13. Savin, Ivan & Marson, Marta & Sutormina, Marina, 2020. "How different aid flows affect different trade flows: Evidence from Africa and its largest donors," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 119-136.
    14. JunYun Kim & Hongshik Lee & Joonhyung Lee, 2022. "Does Aid for Trade Promote Vertical Specialization?," Asian Economic Journal, East Asian Economic Association, vol. 36(2), pages 127-158, June.
    15. Shwe Sin Oo & Masaru Ichihashi, 2015. "How Does Aid For Trade Contribute To ASEAN`s Trading?," IDEC DP2 Series 5-2, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
    16. Dung Ly‐My & Hyun‐Hoon Lee & Donghyun Park, 2021. "Does aid for trade promote import diversification?," The World Economy, Wiley Blackwell, vol. 44(6), pages 1740-1769, June.
    17. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D. & Florian Johannsen, 2012. "Foreign Aid, Exports And Development In Euromed," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 4(02), pages 1-24.
    18. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    19. Inmaculada Martinez-Zarzoso, 2019. "Effects of Foreign Aid on Income through International Trade," Politics and Governance, Cogitatio Press, vol. 7(2), pages 29-52.
    20. Liu, Ailan & Lu, Cuicui & Wang, Zhixuan, 2021. "Does cultural distance hinder exports?: A comparative study of China and the United States," Economic Modelling, Elsevier, vol. 105(C).
    21. 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.
    22. Amadeo Navarro Zapata & María Arrazola & José Hevia, 2023. "Technological intensity in manufacturing trade between ASEAN and the EU: challenges and opportunities," Asia Europe Journal, Springer, vol. 21(1), pages 23-42, March.
    23. Hühne, Philipp & Meyer, Birgit & Nunnenkamp, Peter, 2014. "Aid for trade: Assessing the effects on recipient exports of manufactures and primary commodities to donors and non-donors," Kiel Working Papers 1953, Kiel Institute for the World Economy (IfW Kiel).
    24. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann & M. D. Parra & Stephan Klasen, 2014. "Does Aid Promote Donor Exports? Commercial Interest versus Instrumental Philanthropy," Kyklos, Wiley Blackwell, vol. 67(4), pages 559-587, November.
    25. Inma Martínez-Zarzoso & F. D. Nowak-Lehmann & S. Klasen, 2017. "Aid and Its Impact on the Donor’s Export Industry: The Dutch Case," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(4), pages 769-786, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:22:y:2013:i:6:p:866-894. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.