Aid for Trade and Trade in Services.

Existing research generally finds weak positive effects of aid for trade (AfT) on aggregate merchandise trade of recipients once endogeneity in the AfT-trade relationship is accounted for. In this paper, we confirm weak findings for both aggregate merchandise and services trade of recipients, using...

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Published in:Journal of Development Studies Vol. 57; no. 10; pp. 1723 - 1739
Main Authors: Hoekman, Bernard, Shingal, Anirudh
Format: Article
Published: Taylor & Francis Ltd Oct2021
Subjects:
Online Access:View this record in EBSCOhost
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      dt: Oct2021
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      pub: Taylor & Francis Ltd
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        10.1080/00220388.2021.1873287
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      tig:
        atl: Aid for Trade and Trade in Services.
      aug:
        au:
          Hoekman, Bernard
          Shingal, Anirudh
        affil:
          EUI, Florence, Italy and CEPR, London, UK
          SPJIMR, Mumbai, India and EUI, Florence, Italy
      su:
        Trade regulation
        Infrastructure (Economics)
        Service industries
        Repair & maintenance services
        Commercial policy
        Endogeneity (Econometrics)
      sug:
        subj:
          Trade regulation
          Infrastructure (Economics)
          Service industries
          Administration of General Economic Programs
          Service Establishment Equipment and Supplies Merchant Wholesalers
          Repair & maintenance services
          Commercial policy
          Endogeneity (Econometrics)
      ab: Existing research generally finds weak positive effects of aid for trade (AfT) on aggregate merchandise trade of recipients once endogeneity in the AfT-trade relationship is accounted for. In this paper, we confirm weak findings for both aggregate merchandise and services trade of recipients, using GMM and IV estimations. Moreover, estimates lose statistical significance if non-AfT explanatory variables are treated as endogenous in estimation suggesting identification issues may not have been adequately addressed in extant work. We then examine an alternative proposition: that effects of AfT and different categories of AfT may be observed along the conditional distributions of exports and imports. Our findings confirm this hypothesis. AfT allocated to economic infrastructure, productive capacity building in services and trade policies and regulation is more effective for smaller trading economies, especially in services. We also observe considerable heterogeneity in the trade effects of AfT allocated to individual services sectors, indicating the importance of country-specific diagnostics in targeting AfT allocation.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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