Aid and Its Impact on the Donor’s Export Industry: The Dutch Case

Martínez‐Zarzoso, Inmaculada; Nowak‐Lehmann, Felicitas; Klasen, Stephan

doi:10.1057/s41287-016-0060-5

Cited by 8 publications

(10 citation statements)

References 25 publications

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“…Martínez‐Zarzoso et al. (2017) obtain similar results for the Dutch case.…”

Section: Literature Reviewsupporting

confidence: 54%

“…It has the additional advantage of consistency with the recent literature (Hansen and Rand 2014, Martínez‐Zarzoso et al. 2017, for example).…”

supporting

confidence: 53%

“…Second, it is well documented (Trionfetti 2018) that, in the presence of trade costs, any transfer can have secondary terms of trade effects beyond primary income effects. Third, numerous studies show that development aid specifically is often not impartial but linked to higher bilateral trade between recipient and donor (Wagner 2003, Silva and Nelson 2012, Pettersson and Johansson 2013, Martínez-Zarzoso 2015. This, in turn, can counteract the secondary effects stemming from aid.…”

Section: Introductionmentioning

confidence: 99%

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Transfers in the gravity equation

Kruse

Martínez‐Zarzoso

2021

Canadian J of Economics

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This study integrates development aid into a theoretically founded structural gravity model that considers primary and secondary effects of aid as an income transfer and as a bilateral trade cost determinant. We identify the parameters of our model using a two‐stage approach that includes a state‐of‐the‐art Poisson pseudo‐maximum likelihood gravity estimation for a sample of 132 countries over the period 1995 to 2012. The main findings indicate that bilateral aid only increases bilateral trade for countries that do not have a common language, a past colonial relationship or an RTA. On average, 1 USD of additional foreign aid from all donors increases recipients’ net imports by around 0.36 USD. Our comparative statics indicate that donors experience a reduction in real consumption due to aid and recipients an increase. We also analyze the effect on third countries. The modelling framework also applies to the study of other transfers such as remittances.

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“…Martínez‐Zarzoso et al. (2017) obtain similar results for the Dutch case.…”

Section: Literature Reviewsupporting

confidence: 54%

“…It has the additional advantage of consistency with the recent literature (Hansen and Rand 2014, Martínez‐Zarzoso et al. 2017, for example).…”

supporting

confidence: 53%

Section: Introductionmentioning

confidence: 99%

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Transfers in the gravity equation

Kruse

Martínez‐Zarzoso

2021

Canadian J of Economics

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“…The gravity model has been widely used to analyse the impact of various factors on trade such as the effect of trade facilitation measures, regional trade agreements and development aid (e.g., Márquez‐Ramos, Martínez‐Zarzoso, & Suárez‐Burguet, ; Martínez‐Zarzoso, Nowak‐Lehmann, & Klasen, ; Martínez‐Zarzoso, Nowak‐Lehmann, & Horsewood, ). In its basic form, this model assumes that trade between countries is directly related to a country's economic size and inversely related to the distance between them.…”

Section: Main Hypotheses and Model Specificationmentioning

confidence: 99%

Exports and governance: Is the Middle East and North Africa region different?

Martínez‐Zarzoso

Márquez‐Ramos

2018

World Economy

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This paper aims to analyse whether better governance rewards economic performance and facilitates the integration of the Middle East and North Africa (MENA) region into the world economy. In comparison with other regions in the world economy, MENA countries suffer from important institutional deficiencies, which generate insecurity and difficult international transactions. Despite this fact, the relationship between trade and institutional quality in MENA countries remains unexplored. A gravity model of trade augmented with governance indicators is estimated for the exports of 19 MENA countries, their 189 trading partners and for all exporters in the period from 1996 to 2013. The main results indicate that improvements in five of the six governance indicators increase exports from MENA countries, whereas better governance in destination countries does not affect MENA exports. Instead, each of the six governance indicators used has a positive effect on bilateral trade for the entire sample of exporters (189). Moreover, the effect of country‐pair similarity in governance indicators suggests that a similar level of regulatory quality and rule of law in exporting and importing countries increases exports from MENA countries. Similarities in voice and accountability also foster exports for the average exporter, but not for MENA exporters.

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“…The effect of aid on donor's exports is not stable though and might change over time or vary based on the type of provided aid, recipient countries, or economic sectors. Few studies (Otor, 2014, Martínez-Zarzoso et al, 2017 compared the return of aid of donor countries before and after changes in the donor's foreign aid policies. For some countries, the return of aid grows in time (Japanese return grew approximately 1.5 times when comparing pre-and post-1992 periods (Otor, 2014)), while other donors decreased their aid return over time: Dutch aid was boosting Dutch exports till 1999, however, it is not statistically significant in the new millennium (Martínez-Zarzoso et al, 2017).…”

Section: Aid From the Donor's Perspectivementioning

confidence: 99%

Effects of Development Aid on Donor’s Exports: A Case of the Czech Republic

Dufková

Šálek

2022

Review of Economic Perspectives

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The main goal of foreign aid should be the support of developing regions; however, due to the rising international requirements on the amount of provided aid, donors start to focus on the benefits aid can bring them as well. Both country-specific and general studies have been conducted to evaluate the return of aid from the donor’s perspective, with the majority of them suggesting that provided aid boosts donor’s exports to the developing countries. As no such analysis exists for the Czech Republic, this paper tries to fill this gap and aims to find out whether there is a positive relationship between the Czech aid and Czech exports. While employing the gravity model of international trade, the study, however, suggests that the Czech aid is not statistically significant for the volume of Czech exports. Unlike other donors, the Czech Republic thus leaves a considerable trade potential arising from the foreign aid untapped. The reasons might be other motives behind the Czech aid (both official and unofficial), poor co-operation of aid and trade policies, or changes in trade patterns.

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Aid and Its Impact on the Donor’s Export Industry: The Dutch Case

Cited by 8 publications

References 25 publications

Transfers in the gravity equation

Transfers in the gravity equation

Exports and governance: Is the Middle East and North Africa region different?

Effects of Development Aid on Donor’s Exports: A Case of the Czech Republic

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