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Preferential Market Access, Foreign Aid and Economic Development

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  • Sylvanus Kwaku Afesorgbor

    () (Department of Economics and Business Economics, Aarhus University, Denmark)

  • Kaleb Girma Abreha

    (Department of Economics and Business Economics, Aarhus University, Denmark)

Abstract

Several studies highlight that exporters in developing countries face substantial trade costs. To reduce these costs, a few developed countries mainly Canada, the EU, Japan and the USA granted preferential market access to these exporters. We assess whether these preferential accesses have contributed to the economic development of the beneficiary countries. Focusing on the ACP countries over the period 1970-2009, we show that only the EU preferential scheme is effective in promoting exports and that market access plays a significant and economically large role in the development of beneficiary countries. This effect is more pronounced for high-aid receiving countries.

Suggested Citation

  • Sylvanus Kwaku Afesorgbor & Kaleb Girma Abreha, 2015. "Preferential Market Access, Foreign Aid and Economic Development," Economics Working Papers 2015-04, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2015-04
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    More about this item

    Keywords

    Preferential market access; foreign aid; economic development; gravity model; ACP countries;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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