Preferential Market Access, Foreign Aid and Economic Development

Sylvanus Afesorgbor and Kaleb Girma Abreha
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Kaleb Girma Abreha: Department of Economics and Business Economics, Aarhus University, Denmark

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Several studies highlight that exporters in developing countries face substantial trade costs. To reduce these costs, a few developed countries mainly Canada, the EU, Japan and the USA granted preferential market access to these exporters. We assess whether these preferential accesses have contributed to the economic development of the beneficiary countries. Focusing on the ACP countries over the period 1970-2009, we show that only the EU preferential scheme is effective in promoting exports and that market access plays a significant and economically large role in the development of beneficiary countries. This effect is more pronounced for high-aid receiving countries.

Keywords: Preferential market access; foreign aid; economic development; gravity model; ACP countries (search for similar items in EconPapers)
JEL-codes: F15 O10 R10 (search for similar items in EconPapers)
Pages: 32
Date: 2015-01-27
New Economics Papers: this item is included in nep-int
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