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Title:Aid and Trade from a Donor's Perspective PDF Logo
Authors:Nowak-Lehmann D., Felicitas
Martínez-Zarzoso, Inmaculada
Klasen, Stephan
Herzer, Dierk
Issue Date:2008
Series/Report no.:Proceedings of the German Development Economics Conference, Zürich 2008 27
Abstract:Aid is given for various purposes. Its impact on donors’ exports usually depends on whether it is given for altruistic reasons (to overcome human tragedies and disasters) or in an understanding to promote development (to finance infrastructure or social projects). As to humanitarian aid the impact of aid on donors’ exports will be most probably lower than in the latter case where related and unrelated imports for realizing development projects have been explicitly or implicitly agreed upon. Germany is known to be a country that ranks below average in tying its aid among the EU countries. Nonetheless there have been studies that found an extremely high positive impact of German bilateral aid on German exports. This finding will be re-examined in this study. An augmented gravity model is utilized to evaluate the impact of German bilateral aid on German exports. Stochastic and deterministic trends in the series are controlled to avoid spurious regression results.
Subjects:bilateral aid
donors’ exports
time series properties of panel data
ECM and DOLS estimation in a panel context
Document Type:Conference Paper
Appears in Collections:Proceedings of the German Development Economics Conference, 2008 (Zürich)

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