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Title:The economic benefits of giving aid in terms of donors' exports PDF Logo
Authors:Martínez-Zarzoso, Inmaculada
Nowak-Lehmann D., Felicitas
Klasen, Stephan
Issue Date:2010
Series/Report no.:Discussion papers, Ibero America Institute for Economic Research 202
Abstract:This paper uses the gravity model of trade to investigate the link between bilateral and multilateral foreign aid and exports. There are three primary findings from this approach. First, in the long term, the average return, in terms of an increase in the donor's level of goods exports, is approximately $ 2.15 US for every aid dollar spent on bilateral aid. Second, multilateral aid has a positive effect on export levels only in the short term, whereas in the long term, the effect is negative. Third, aid from other donors does not give rise to a displacement effect for a given donor-recipient trade relationship. This paper also makes comparisons among donors and finds that aid has a positive and significant effect on most donors' export levels.
Subjects:exports
foreign aid
donors
panel data
sample selection
GLM
JEL:F10
F35
Document Type:Working Paper
Appears in Collections:Discussion Papers, IAI, Universität Göttingen

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