Does aid for trade promote FDI from enterprises of donors to recipient countries? Based on the spatial spillover effect of China's Aid for Trade

Churen Sun, Jiamin Zhao, Jinqiang Xu and Jingjing Liang

Review of Development Economics, 2025, vol. 29, issue 2, 1004-1023

Abstract: This paper investigates the direct and spatial spillover effects of China's Aid for Trade (AfT) on Chinese enterprises' foreign direct investment (FDI) in recipient countries. The results show that China's AfT can effectively promote FDI by Chinese firms in recipient countries, and the promotion effect is determined by both the direct effect and the spatial spillover effect. The mechanism test finds that China's AfT can promote FDI by Chinese firms through improving the infrastructure of the recipient countries and enhancing the image of the residents of the recipient countries toward China. The study suggests that the introduction of spatial spillover effects in the study of aid is of great significance in promoting the development of research in the field of aid. This paper enriches the conclusions of aid research in the field of economics on the one hand and broadens the boundaries of aid effectiveness research on the other hand.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/rode.13156

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:rdevec:v:29:y:2025:i:2:p:1004-1023

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1363-6669

Access Statistics for this article

Review of Development Economics is currently edited by E. Kwan Choi

More articles in Review of Development Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().