Does official development assistance benefit the donor economy? New evidence from Japanese overseas infrastructure projects
Shuhei Nishitateno
International Tax and Public Finance, 2024, vol. 31, issue 4, No 5, 1037-1065
Abstract:
Abstract Given the growing pressure on donors to curtail foreign aid budgets, analyzing the effectiveness of bilateral official development assistance (ODA) in realizing national interests has become more significant than ever. From the viewpoint of economic interests, prior research has revealed that ODA can help expand donor exports and outward foreign direct investments. This study is the first to provide evidence that ODA can also help firms from donor countries to win infrastructure projects in recipient countries. Employing unique contract data on Japanese overseas infrastructure projects, I estimate a fixed effects Poisson model with a panel dataset for 158 recipients for the period between 1970 and 2020. The results suggest that 17% of the total number of overseas infrastructure projects contracted to Japanese firms during 1970–2020 were attributable to Japanese ODA disbursement. I also explore the potential mechanism, finding that the Japanese ODA-infrastructure link is strengthened when Japanese loans and grants are simultaneously provided to a recipient country. This finding is consistent with the view that pre-investment studies conducted as part of technical cooperation could generate goodwill effects on Japanese firms during their bidding for Japanese yen loan projects.
Keywords: Official development assistance; Overseas infrastructure projects; Poisson regression model; Japan (search for similar items in EconPapers)
JEL-codes: F21 F35 O18 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://link.springer.com/10.1007/s10797-023-09788-8 Abstract (text/html)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Does Official Development Assistance Benefit the Donor Economy? New evidence from Japanese overseas infrastructure projects (2023) 
Working Paper: Does official development assistance benefit the donor economy? New evidence from Japanese overseas infrastructure projects (2023) 
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:kap:itaxpf:v:31:y:2024:i:4:d:10.1007_s10797-023-09788-8
Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2
DOI: 10.1007/s10797-023-09788-8
Access Statistics for this article
International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf
More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().