Does Swedish aid help or hinder bilateral trade : An empirical study on the effect of Official Development Assistance and Aid for Trade
A growing consensus regarding the positive benefits of trade has during the last decades attracted actors from the developing world to enter the world market. Official Development Assistance (ODA) and more especially Aid for Trade (AfT) have thus come to play an important role in development strate...
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| Format: | Others |
| Language: | English |
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Uppsala universitet, Nationalekonomiska institutionen
2012
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| Online Access: | http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-168242 |
| Summary: | A growing consensus regarding the positive benefits of trade has during the last decades attracted actors from the developing world to enter the world market. Official Development Assistance (ODA) and more especially Aid for Trade (AfT) have thus come to play an important role in development strategies. This paper seeks to empirically analyze the link between bilateral trade and ODA and AfT, given by Sweden. The paper uses a gravity model of trade and includes 126 countries during the period 1996 to 2009. The estimates indicate that both Sweden and its trading partners engage in more bilateral trade when ODA-disbursements are made. It’s further suggested that AfT-receiving-countries export more to Sweden than non-recipients do. The paper also control for differences between geographical areas and show that the ODA effect strongly varies in degree and across regions. === Aid and Trade; Gravity Model; Foreign Aid; Official Development Assistance; Aid for Trade; Bilateral Trade; Developing Countries |
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