D Felicitas Nowak-Lehmann

Does German Development Aid Promote German Exports

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% of the aid given. In addition, the evolution of the estimated coefficients over time shows an effect that is consistently positive but that oscillates over time. Interestingly, after a decrease in the 1990s, the estimated coefficients of the effect of aid on trade show a steady increase in the period between 2001 and 2005. The paper 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.We also find some evidence that aid given by other EU members reduces German exports.

Aid and Trade - A Donor's Perspective

Abstract One reason donors provide foreign aid is to support their exports to aid-recipient countries. Time series data for Germany suggests an average return of between US

Economic and Geographical Distance: Explaining Mercosur Sectoral Exports to the EU

1.04–

Crisis and Citizens’ Trust in the European Central Bank — Panel Data Evidence for the Euro Area, 1999–2012

1.50 for each US dollar of aid spent by Germany. Although this is well below previous estimates, the value is robust to different specifications and econometric approaches. Interestingly, we find strong evidence of crowding out between bilateral donors in the sense that bilateral aid from other EU members significantly reduces exports from Germany to the recipients. The evidence suggests that, in the long run, aid causes exports and not vice versa. We discuss the implications these findings might have for aid volumes and allocation.

Is Aid for Trade Effective? A Panel Quantile Regression Approach

The objective of this paper is to apply a modified gravity model to annual exports disaggregated by sector, from MERCOSUR + Chile to the 15 current members of the EU. In doing so, we aimed to classify sectors according to their sensitivity to geographical and economic distance and to identify which commodities enjoy export strength even without further progress in trade liberalisation with the EU. In the estimation we made use of two additional explanatory variables which are found to be relevant when explaining trade, namely, infrastructure and exchange rates. An exchange rate index is built that takes into account protection. Our results support the view that different sectors have a different sensitivity to distance and highlight the importance of using disaggregated data when analysing international trade flows.

Does German Development Aid boost German Exports and German Employment? A Sectoral Level Analysis

ABSTRACT Throughout the crisis, citizens’ trust in the European Central Bank has significantly declined throughout the Euro area (EA-12). Although a decline in the core countries of the EA-12 has been distinct, a more pronounced decline has been taking place in the peripheral countries of the EA-12. Taking panel data and using a fixed effects DFGLS estimation for an EA-12 country sample over the time period of 1999–2012 with a total of 305 observations, this paper detects a negative and significant relationship between unemployment and trust in times of crisis. The robustness analysis of the paper confirms that this decrease in trust is strongly driven by the significant increase in unemployment rates in the four peripheral countries Spain, Ireland, Greece and Portugal.

FOREIGN AID, EXPORTS AND DEVELOPMENT IN EUROMED

This paper investigates whether Aid for Trade (AfT) improves export performance, i.e. does AfT lead to greater exports? Using panel data and panel quantile regression, our results suggest that overall AfT disbursements promote the export of goods and services mainly for the .50 and .75 quantiles. Our results also show that for some types of AfT this effect essentially vanishes at the lower tail of the conditional distribution of exports. Hence, countries that export more in volume are those benefiting most from AfT. We also investigate which types of AfT are effective. In particular, we find that aid used to build production capacity is effective. This type of aid is associated with higher exports for almost all quantiles, with the effect increasing at the upper tail of the conditional distribution. Aid used to build infrastructure is also found to affect exports at the upper tail of the distribution. In contrast, aid for trade policy and aid disbursed for general budget support (an untargeted type of aid) are not associated with greater export levels. This finding holds true irrespective of the quantile.

Modelling the dynamics of market shares in a pooled data setting: econometric and empirical issues

Abstract This paper uses an augmented gravity model of trade to investigate the link between German development aid and sectoral exports from Germany to aid recipient countries with data from 1978–2011. The findings indicate that in the long run each dollar of German aid is associated with an average increase of US

Unit Values, Productivity, and Trade - Determinants of Spanish Export Strength

0.83 US of German goods exports. The sectors that benefit the most in terms of exports and employment are machinery, electrical equipment and transport equipment. According to our estimates using input-output analysis and a partial equilibrium framework, the aid-induced gains in sectoral exports are associated with the gross employment of approximately 216,000 people.

In search of FDI-led growth in developing countries: The way forward

This paper investigates the link between foreign aid and exports between the two shores of the Mediterranean. The main hypothesis is that the Euro-Mediterranean Process should promote not only trade but also stronger links between the European Union (EU) and the Middle East and North Africa (MENA). Hence, we expect development aid to have a positive impact on exports, which could also intensify the aid-trade relationship. In particular, we expect to find higher trade volumes in both directions after the process started in 1995 and intensified in the late 1990s and early 2000s, when several bilateral free trade agreements were signed. A gravity model augmented with bilateral and multilateral aid and trade regime variables is estimated for exports and imports from recipient countries to donor countries for the period 1988 to 2007 using advanced panel data techniques. Our method addresses the endogeneity bias of the trade regime/economic integration agreement (EIA) variable, assuming that decisions to form or enlarge EIAs are slow-moving relative to trade flows.