Does German Development Aid boost German Exports and German Employment? A Sectoral Level Analysis

Inmaculada Martínez-Zarzoso, Nowak-Lehmann Felicitas (), Stephan Klasen and Johannsen Florian ()
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Nowak-Lehmann Felicitas: Ibero-America Institute for Economic Research, University of Göttingen, Platz der Göttinger Sieben 3, 37073 Göttingen, Germany
Johannsen Florian: Department of Economics, University of Göttingen, Platz der Göttinger Sieben 3; 37073 Göttingen, Germany
Authors registered in the RePEc Author Service: Felicitas Nowak-Lehmann D.

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2016, vol. 236, issue 1, 71-94

Abstract: This paper uses an augmented gravity model of trade to investigate the link between German development aid and sectoral exports from Germany to aid recipient countries with data from 1978–2011. The findings indicate that in the long run each dollar of German aid is associated with an average increase of US$ 0.83 US of German goods exports. The sectors that benefit the most in terms of exports and employment are machinery, electrical equipment and transport equipment. According to our estimates using input-output analysis and a partial equilibrium framework, the aid-induced gains in sectoral exports are associated with the gross employment of approximately 216,000 people.

Keywords: international trade; foreign aid; Germany (search for similar items in EconPapers)
JEL-codes: F10 F35 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:236:y:2016:i:1:p:71-94

DOI: 10.1515/jbnst-2015-1003

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