Foreign Transfers, Manufacturing Growth and the Dutch Disease Revisited

Adwoa Nsor-Ambala

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: In a well-known study Rajan and Subramanian (2011) argue that aid causes a ‘Dutch Disease’ effect in aid-recipient countries. This study successfully replicates the first part of their findings and then uses a new, extended data set, different estimation methods, and another measure of aid to analyze the robustness of their results. In addition the study explores the effect of remittance flows on the relative growth of manufacturing sectors. In general, findings from the new, extended data set do not provide sufficient evidence to support the ‘Dutch Disease’ argument. In the case of international remittance flows, the findings indicate a positive remittance-manufacturing-growth relation, particularly in fixed effects models.

Keywords: Foreign Aid; Remittances; Dutch Disease; Manufacturing. (search for similar items in EconPapers)
JEL-codes: F24 F35 L60 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2015-08-19
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:15/663

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