Aid for trade and international transactions in goods and services

Bernard Hoekman and Anirudh Shingal

Review of International Economics, 2020, vol. 28, issue 2, 320-340

Abstract: The empirical literature on aid for trade (AfT) mainly considers its effects on merchandise trade and investment. In this paper, we provide an in‐depth analysis of the relationship between AfT and trade in services using both aggregate and bilateral data. We find a statistically weak effect of AfT on both goods and services trade in our aggregate analysis once we account for endogeneity in the AfT–trade relationship. In contrast, the bilateral analysis suggests that AfT, in particular that allocated to services activities, especially economic infrastructure, has a positive effect on recipients’ merchandise exports to donor countries. This novel finding is robust across different lag structures and provides evidence of complementarities between services AfT and goods trade.

Date: 2020
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Citations: View citations in EconPapers (12)

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https://doi.org/10.1111/roie.12452

Related works:
Working Paper: Aid for Trade and International Transactions in Goods and Services (2017)
Working Paper: Aid for Trade and International Transactions in Goods and Services (2017)
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