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Foreign Transfers, Manufacturing Growth and the Dutch Disease Revisited

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  • Adwoa A. Nsor-Ambala

Abstract

In a well-known study Rajan and Subramanian (2011) argue that aid causes a ‘Dutch Disease’ effect in aid-recipient countries. This study successfully replicates the first part of their findings and then uses a new, extended data set, different estimation methods, and another measure of aid to analyze the robustness of their results. In addition the study explores the effect of remittance flows on the relative growth of manufacturing sectors. In general, findings from the new, extended data set do not provide sufficient evidence to support the ‘Dutch Disease’ argument. In the case of international remittance flows, the findings indicate a positive remittance-manufacturing-growth relation, particularly in fixed effects models.

Suggested Citation

  • Adwoa A. Nsor-Ambala, 2015. "Foreign Transfers, Manufacturing Growth and the Dutch Disease Revisited," Bristol Economics Discussion Papers 15/663, Department of Economics, University of Bristol, UK.
  • Handle: RePEc:bri:uobdis:15/663
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    References listed on IDEAS

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    Cited by:

    1. Temple, Jonathan & Van de Sijpe, Nicolas, 2017. "Foreign aid and domestic absorption," Journal of International Economics, Elsevier, vol. 108(C), pages 431-443.

    More about this item

    Keywords

    Foreign Aid; Remittances; Dutch Disease; Manufacturing.;

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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