Date: 2021
Type: Article
Aid for trade and trade in services
The journal of development studies, 2021, Vol. 57, No. 10, pp. 1723-1738
HOEKMAN, Bernard M., SHINGAL, Anirudh, Aid for trade and trade in services, The journal of development studies, 2021, Vol. 57, No. 10, pp. 1723-1738
- https://hdl.handle.net/1814/74093
Retrieved from Cadmus, EUI Research Repository
Existing research generally finds weak positive effects of aid for trade (AfT) on aggregate merchandise trade of recipients once endogeneity in the AfT-trade relationship is accounted for. In this paper, we confirm weak findings for both aggregate merchandise and services trade of recipients, using GMM and IV estimations. Moreover, estimates lose statistical significance if non-AfT explanatory variables are treated as endogenous in estimation suggesting identification issues may not have been adequately addressed in extant work. We then examine an alternative proposition: that effects of AfT and different categories of AfT may be observed along the conditional distributions of exports and imports. Our findings confirm this hypothesis. AfT allocated to economic infrastructure, productive capacity building in services and trade policies and regulation is more effective for smaller trading economies, especially in services. We also observe considerable heterogeneity in the trade effects of AfT allocated to individual services sectors, indicating the importance of country-specific diagnostics in targeting AfT allocation.
Additional information:
Published online: 08 February 2021
Cadmus permanent link: https://hdl.handle.net/1814/74093
Full-text via DOI: 10.1080/00220388.2021.1873287
ISSN: 0022-0388; 1743-9140
Publisher: Routledge
Initial version: http://hdl.handle.net/1814/67007
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