 Revisiting economic effectiveness of foreign aid: The case of Japanese aid to ChinaJing Shao and Maojun Wang The World Economy, 2022, vol. 45, issue 7, 2284-2304 Abstract: Over the years, several studies have assessed whether foreign aid plays an active role in promoting economic growth of the recipient country, but to date, it is still an unresolved question. Based on the case of Japan's aid to China, this paper uses the geographically and temporally weighted regression (GTWR) model to evaluate the economic effect of aid, compared with the ordinary least squares (OLS) and geographically weighted regression (GWR) models. The results reveal the following: (1) In the OLS model, Japanese aid to China surprisingly hampered China's economic growth. (2) In the GWR model, the Japanese aid's effectiveness appears a noticeable regional differentiation in line with both the orientation and extent of aid. (3) In the GTWR model, however, the economic effectiveness of aid changes both over time and in space. The spatiotemporal heterogeneous relationship between foreign aid and economic growth in a recipient country challenges the traditional belief that aid either can or cannot promote the recipient country's economic growth. This finding provides a new perception of the economic effectiveness of aid. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:45:y:2022:i:7:p:2284-2304 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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