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Aid, Aid for Trade, and bilateral trade: An empirical study
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2013 (English)In: Journal of International Trade and Economic Development, ISSN 0963-8199, E-ISSN 1469-9559, Vol. 22, no 6, 866-894 p.Article in journal (Refereed) Published
Abstract [en]

In a gravity model for 184 countries between 1990 and 2005, we show that bilateral aid is not only positively correlated with donor exports, as suggested in earlier studies, but also positively associated with recipient exports to donors. Our interpretation is that an intensified aid relation reduces the effective cost of distance. We find a particularly strong effect of aid in the form of technical assistance. The effect of trade-related assistance (Aid for Trade) is small and fully accounted for by aid to investments in trade-related infrastructure. The aid-trade link is particularly strong for donor exports to Sub-Saharan African countries and for recipient exports of strategic materials.

Place, publisher, year, edition, pages
2013. Vol. 22, no 6, 866-894 p.
Keyword [en]
foreign aid, international trade, exports, gravity, Aid for Trade, developing countries, F35, O19, O24
National Category
Social Sciences
URN: urn:nbn:se:uu:diva-204816DOI: 10.1080/09638199.2011.613998ISI: 000321170800003OAI: oai:DiVA.org:uu-204816DiVA: diva2:640378
Available from: 2013-08-13 Created: 2013-08-12 Last updated: 2013-08-13Bibliographically approved

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Pettersson, Jan
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