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Project Aid and Firm Performance

Author

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  • Marchesi, Silvia

    (University of Milan Bicocca)

  • Masi, Tania

    (University of Chieti Pescara)

  • Paul, Saumik

    (Newcastle University)

Abstract

This paper evaluates the effect of development project aid from the World Bank and China on firms' sales growth, using a large dataset of 110864 firms spanning 121 countries between 2001 and 2016. We find that, contrary to the World Bank, Chinese ODA projects increase, on average, firm sales and, compared to sector-specific, Chinese region-specific aid positively affect firm performance. Finally, we show that the positive effect of Chinese aid is stronger for firms lacking transport infrastructure (and with better electricity provision), suggesting that aid may improve firm performance by releasing their infrastructure constraints.

Suggested Citation

  • Marchesi, Silvia & Masi, Tania & Paul, Saumik, 2021. "Project Aid and Firm Performance," IZA Discussion Papers 14705, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14705
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    Cited by:

    1. Cruzatti C., John & Dreher, Axel & Matzat, Johannes, 2023. "Chinese aid and health at the country and local level," World Development, Elsevier, vol. 167(C).
    2. Andreas Freytag & Miriam Kautz & Moritz Wolf, 2024. "Chinese aid and democratic values in Latin America," Public Choice, Springer, vol. 198(3), pages 531-593, March.
    3. Bomprezzi, Pietro & Marchesi, Silvia, 2023. "A firm level approach on the effects of IMF programs," Journal of International Money and Finance, Elsevier, vol. 132(C).
    4. Lisa Chauvet & Marin Ferry, 2023. "L’efficacité de l’aide : quelles évolutions de la littérature depuis deux décennies ? WP329," Working Papers hal-04141543, HAL.

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    More about this item

    Keywords

    aid effectiveness; world bank projects; chinese projects; geo-coding; firm growth;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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