Does German Development Aid Promote German Exports?

Immaculada Martínez-Zarzoso, Felicitas Nowak-Lehmann D., Stephan Klasen and Mario Larch

No 331808, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper uses a static and dynamic gravity model of trade to investigate the link between German development aid and exports from Germany to the recipient countries. The findings indicate that in the long run,German aid is associated with an increase in exports of goods that is larger than the aid flow, with a point estimate of 140 percent of the aid given. In addition, the evolution of the estimated coefficients over time shows an effect that is consistently positive but which oscillates over time. Interestingly, in the period from 2001 to 2005, a steady increase in the effect of aid on trade can be observed following a decrease in this phenomenon in the second half of the nineties. The paper also distinguishes among recipient countries and finds that the return on aid measured by German exports is higher for aid to countries considered “strategic aid recipients” by the German government.

Keywords: International Development; International Relations/Trade (search for similar items in EconPapers)
Pages: 37
Date: 2008
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https://ageconsearch.umn.edu/record/331808/files/4537.pdf (application/pdf)

Related works:
Journal Article: Does German Development Aid Promote German Exports? (2009)
Journal Article: Does German Development Aid Promote German Exports? (2009)
Working Paper: Does German Development Aid Promote German Exports? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331808

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