Kiel Working Papers, Kiel Institute for World Economics
No 1852:
Who Benefits from Aid for Trade? Comparing the Effects on Recipient versus Donor Exports
Philipp Hühne, Birgit Meyer and Peter Nunnenkamp
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
Keywords: aid effectiveness, aid for trade, recipient exports, donor exports; (follow links to similar papers)
JEL-Codes: F35,; F14; (follow links to similar papers)
38 pages, June 2013
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