Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98158
Authors: 
Martinez-Zarzoso, Inmaculada
Nowak-Lehmann D., Felicitas
Rehwald, Kai
Year of Publication: 
2014
Series/Report no.: 
Discussion Papers, Center for European Governance and Economic Development Research 210
Abstract: 
This paper investigates whether Aid for Trade (AfT) improves export performance, i.e. does AfT lead to greater exports? Using panel data and panel quantile regression, our results suggest that overall AfT disbursements promote the export of goods and services mainly for the .50 and .75 quantiles. Our results also show that for some types of AfT this effect essentially vanishes at the lower tail of the conditional distribution of exports. Hence, countries that export more in volume are those benefiting most from AfT. We also investigate which types of AfT are effective. In particular, we find that aid used to build production capacity is effective. This type of aid is associated with higher exports for almost all quantiles, with the effect increasing at the upper tail of the conditional distribution. Aid used to build infrastructure is also found to affect exports at the upper tail of the distribution. In contrast, aid for trade policy and aid disbursed for general budget support (an untargeted type of aid) are not associated with greater export levels. This finding holds true irrespective of the quantile.
Subjects: 
development aid
North-South trade
aid for trade
panel data
aid effectiveness
JEL: 
F10
Document Type: 
Working Paper

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