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Who benefits from aid for trade? Comparing the effects on recipient versus donor exports

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  • Hühne, Philipp
  • Meyer, Birgit
  • Nunnenkamp, Peter

Abstract

Recent studies offer an ambiguous picture on the effectiveness of foreign aid in strengthening the export capacity of recipient countries. Moreover, the literature on aid for trade (AfT) has often neglected that exporters in the donor countries may be among the main beneficiaries. We hypothesize that AfT is as much in the self-interest of donor countries as it may have promoted the exports of recipient countries. We simultaneously estimate and compare the effects of AfT on trade in both directions. We find that AfT increases recipient exports to donors as well as recipient imports from donors. The first effect tends to dominate the latter, which contradicts the skeptical view that donors grant AfT primarily to promote their own export interests.

Suggested Citation

  • Hühne, Philipp & Meyer, Birgit & Nunnenkamp, Peter, 2013. "Who benefits from aid for trade? Comparing the effects on recipient versus donor exports," Kiel Working Papers 1852, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:1852
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    Cited by:

    1. 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.
    2. Sèna Kimm Gnangnon, 2016. "Market Access of OECD Donor Countries and Their Supply of Aid for Trade," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 1-38, February.
    3. repec:dug:journl:y:2017:i:2:p:169-178 is not listed on IDEAS
    4. Donaubauer, Julian & Meyer, Birgit & Nunnenkamp, Peter, 2016. "Aid, Infrastructure, and FDI: Assessing the Transmission Channel with a New Index of Infrastructure," World Development, Elsevier, vol. 78(C), pages 230-245.
    5. Philipp Hühne & Birgit Meyer & Peter Nunnenkamp, 2014. "Does Aid for Trade from the North promote South-South trade?," Applied Economics Letters, Taylor & Francis Journals, vol. 21(17), pages 1230-1233, November.
    6. Heinrich, Tobias & Kobayashi, Yoshiharu & Bryant, Kristin A., 2016. "Public Opinion and Foreign Aid Cuts in Economic Crises," World Development, Elsevier, vol. 77(C), pages 66-79.
    7. 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 halshs-01084600, HAL.
    8. Kym Anderson, 2016. "Contributions Of The Gatt/Wto To Global Economic Welfare: Empirical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 30(1), pages 56-92, February.
    9. Sèna Kimm Gnangnon & Shishir Priyadarshi, 2016. "Export Product Diversification, Services Production and Exports in Least Developed Countries," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-36, October.
    10. Gnangnon, Sèna Kimm & Roberts, Michael, 2015. "Aid for trade, foreign direct investment and export upgrading in recipient countries," WTO Staff Working Papers ERSD-2015-10, World Trade Organization (WTO), Economic Research and Statistics Division.
    11. Jaime DE MELO & Laurent WAGNER, 2015. "Aid For Trade as finance for the Poor," Working Papers P125, FERDI.
    12. 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).
    13. Martinez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas & Rehwald, Kai, 2014. "Is aid for trade effective? A quantile regression approach," Center for European, Governance and Economic Development Research Discussion Papers 210, University of Goettingen, Department of Economics.
    14. Gnangnon, Sèna Kimm, 2016. "Aid for Trade and trade tax revenues in developing countries," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 9-22.
    15. repec:wsi:jicepx:v:08:y:2017:i:02:n:s1793993317500107 is not listed on IDEAS

    More about this item

    Keywords

    aid effectiveness; aid for trade; recipient exports; donor exports;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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