scholarly journals Aid for Trade and Recipient Countries’ Export Structure: Does Trade Policy Liberalisation Matter?

2018 ◽  
Vol 18 (1) ◽  
pp. 56-85 ◽  
Author(s):  
Sèna Kimm Gnangnon
Keyword(s):  
Trade Policy ◽  
Developed Countries ◽  
Least Developed Countries ◽  
Data Set ◽  
Full Sample ◽  
Export Structure ◽  
Export Ratio ◽  
Aid For Trade ◽  
Methods Of Moments ◽  
Positive Effect

This article investigates the effect of aid-for-trade (AfT) inflows on beneficiary-countries’ export structure. It additionally examines whether this effect depends on recipient-countries’ level of trade policy liberalisation. Export structure is measured by the ratio of exports of low-skilled and technology-intensive manufactures to total primary export products (LOW), the ratio of exports of medium-skilled and technology-intensive manufactures to total primary export products (MEDIUM) and the ratio of exports of high-skilled and technology-intensive manufactures to total primary export products (HIGH). The analysis has been carried out using an unbalanced panel data set of 121 countries (of which 41 least-developed countries [LDCs]) over the period 2002–2015. Using the two-step generalised methods of moments (GMM) approach, the empirical results show that AfT inflows exert a positive and significant impact on recipient countries’ export ratios LOW and HIGH, but not on the MEDIUM export ratio. For LDCs, AfT inflows influence positively LOW and negatively MEDIUM and HIGH. Furthermore, for both the full sample and LDCs, there is a strong positive effect of the cumulative AfT inflows on the three export ratios. Finally, the effect of AfT inflows on export ratios appears to be dependent on the degree of trade policy liberalisation. JEL: F13, F14, F35, O24

scholarly journals Effect of Productive Capacities on Economic Complexity: Do Aid for Trade flows Matter?

2021 ◽  
Author(s):  
Sèna Kimm GNANGNON
Keyword(s):  
Scale Up ◽  
Developed Countries ◽  
Least Developed Countries ◽  
Economic Complexity ◽  
Generalized Methods Of Moments ◽  
Aid For Trade ◽  
Low Levels ◽  
Methods Of Moments ◽  
First Time ◽  
Positive Effect

Abstract The COVID-19 health pandemic has exposed the strong vulnerabilities of countries, including developing ones to shocks, and underlined the need for exploring ways to strengthen countries' resilience to future shocks. The current paper uses the dataset made recently available by the United Nations Conference on Trade and Development (UNCTAD) to examine (for the first time) the effect of productive capacities on economic complexity. The analysis further investigates whether Aid for Trade (AfT) flows matter for the influence of productive capacities on economic complexity in recipient-countries. The analysis uses a sample of 126 countries (including both developed and developing countries) over the period 2002-2018, and adopts the two-step system Generalized Methods of Moments (GMM) approach. Results have shown that productive capacities exert a positive effect on economic complexity over the full sample. However, the magnitude of this positive effect varies across different sub-samples, with Least developed countries (LDCs) enjoying the lowest magnitude of this positive effect. Furthermore, total AfT flows are positively associated with economic complexity, with LDCs enjoying a higher positive effect than other countries. Interestingly, total AfT flows exert a higher positive effect on economic complexity in countries that experience low levels of overall productive capacities. The latter finding highlights the need for donor-countries to scale-up AfT flows in favour of countries (such as LDCs) that are characterized by low levels of productive capacities. Finally, the empirical outcomes indicate that productive capacities enhance economic complexity in countries that receive higher amounts of total NonAfT flows.

Effect of Aid for Trade Unpredictability on Trade Policy in Recipient-Countries

2019 ◽  
Vol 19 (2) ◽  
pp. 177-203
Author(s):  
Sèna Kimm Gnangnon
Keyword(s):  
Trade Policy ◽  
Developed Countries ◽  
Trade Policies ◽  
Least Developed Countries ◽  
Restrictive Trade ◽  
Negative Effect ◽  
Aid For Trade ◽  
Positive Effect

This article examines the effect of the unpredictability of Aid for Trade (AfT) flows on trade policy in 124 recipient-countries, of which 42 are least developed countries (LDCs), over the period 2002–2016. The analysis shows that while AfT flows exert a positive effect on trade policy liberalisation, AfT unpredictability induces the adoption of restrictive trade policies. These results apply to LDCs and other countries, although the magnitude of the negative effect of AfT unpredictability on trade policy liberalisation is higher for LDCs than for other countries. Furthermore, AfT unpredictability reduces the positive trade policy liberalisation effect of AfT flows. JEL: F13, F14, F35

scholarly journals Development Aid and Export Resilience in Developing Countries: A Reference to Aid for Trade

2021 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Negative Impact ◽  
Developed Countries ◽  
Development Aid ◽  
Least Developed Countries ◽  
Member States ◽  
Health Crisis ◽  
Aid For Trade ◽  
The 2008 Financial Crisis ◽  
Positive Effect

The COVID-19 pandemic, like previous major crises, such as the 2008 financial crisis, has had a severe negative impact on international trade flows. International institutions are now exploring ways to help their member states recover from the health crisis, and foster the resilience of their economies to future crises. As far as trade is concerned, institutions that deal primarily with trade matters are making effort to help their member states foster the resilience of their trade performance to future shocks. In this context, the World Trade Organization (WTO), which is the only international organization that deals with the global rules of trade between nations, has organized a series of events since the onset of the COVID-19 pandemic. It has now planned to hold in September 2021 the 2021 WTO Public Forum whose theme is "Trade Beyond COVID-19: Building Resilience". The present paper aims to contribute to this debate by examining the effect of development aid, i.e., the so-called official development aid, in particular its Aid for Trade (AfT) component, on export resilience. The resilience of exports refers to the capacity of countries' aggregate exports to resist to shocks, whether environmental or external shocks. The core argument of the analysis is that development aid would affect export resilience through its effect on productive capacities. The analysis covers 93 developing countries over the period 2002-2018. The findings indicate that total development aid flows, including both AfT flows and NonAfT flows exert a positive effect on export resilience. Among AfT components, AfT for productive capacities appears to exert a higher positive effect on export resilience than AfT for economic infrastructure and AfT for trade policy and regulation. In addition, development aid (whatever the aid variable considered) exerts the highest positive effect on export resilience in countries (such as Least developed countries - LDCs) that have the lowest level of productive capacities. These findings highlight the need for donor-countries to supply higher development aid flows, in particular AfT flows to countries such as LDCs that have low levels of productive capacities.

Aid for Trade flows and Real Exchange Rate Volatility in Recipient-Countries

2020 ◽  
pp. 2250001
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Exchange Rate Volatility ◽  
Developed Countries ◽  
Least Developed Countries ◽  
Full Sample ◽  
Aid For Trade ◽  
Trade Volatility ◽  
Export Product ◽  
Real Exchange Rate Volatility

This paper aims to contribute to the literature on the determinants of real exchange rate volatility by investigating the effect of Aid for Trade (AfT) flows on real exchange rate volatility in recipient-countries. The empirical findings show that over the full sample, AfT flows influence negatively the volatility of real exchange rate, with a lower reducing effect on Least developed countries (LDCs) compared to NonLDCs. The channels through which this effect materializes include export product concentration, institutional and governance quality, foreign direct investment inflows and terms of trade volatility. These results show that AfT flows clearly matter for real exchange rate volatility.

Trade space and trade policy: an empirical assessment

2018 ◽  
Vol 45 (3) ◽  
pp. 498-520
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Trade Policy ◽  
Empirical Analysis ◽  
Policy Design ◽  
Data Set ◽  
Content Type ◽  
Generalized Methods Of Moments ◽  
Restrictive Measures ◽  
Methods Of Moments ◽  
The Empirical Analysis ◽  
Positive Effect

Purpose The purpose of this paper is to examine the behavior of governments in terms of trade policy design when they experience a lack of foreign resources from international trade after ensuring the sustainability of their external debt. To do so, the paper defines two concepts of trade space: “De Facto Trade Space” and “De Jure trade space.” Design/methodology/approach To conduct this study, the author relies on a panel data set comprising 109 countries over the period 1998–2014. To perform the empirical analysis, the author has mainly used the system generalized methods of moments approach. Findings The empirical analysis suggests evidence that trade space matters significantly for trade policy. Indeed, “De Facto Trade Space” is consistently associated with greater trade policy liberalization, with this positive effect being higher, the higher the development level – proxied by the real per capita income – of the concerned country. “De Jure Trade Space” tends to lead to greater trade policy liberalization in less advanced developing countries, but is associated with the adoption of trade restrictive measures in more advanced countries. Additionally, results suggest different impacts on trade policy of “Positive De Jure Trade Space” and “Negative De Jure Trade Space.” Research limitations/implications These findings suggest that the trade space, as defined in this study, plays a key role in trade policy design by policymakers. Practical implications The current study shows that trade space could significantly matter for trade policy design by policymakers. Originality/value To the best of the author’s knowledge, this is the study dealing directly with the “trade space” concept as well as its impact on trade policy.

scholarly journals Determinants of the Korean agricultural trade with the LDCs and the OECD countries

2014 ◽  
Vol 60 (No. 3) ◽  
pp. 110-122
Author(s):  
S.Y. Lee ◽  
S.S. Lim
Keyword(s):  
Trade Policy ◽  
Developed Countries ◽  
Oecd Countries ◽  
Agricultural Trade ◽  
Policy Reforms ◽  
Least Developed Countries ◽  
Tariff Rates ◽  
Stage Analysis ◽  
Import Trade ◽  
Domestic Products

The study aims to analyze Korea’s import trade in agricultural products with (i) the least developed countries (LDCs) and (ii) the Organization for Economic Co-operation and Development (OECD) countries. Extended versions of a gravity model are adopted and the balanced panel data for the unilateral trade over the period of 2003 to 2008 are constructed using the Harmonized System Codes. The Heckman two-stage analysis is incorporated to detect the potential selection bias arising from many zero trades. We find that only preferential tariffs on the LDCs have significantly contributed to the trade flows. However, in contrast, gross domestic products (GDPs), free trade agreements (FTAs), the applied tariff rates, and the exchange rates turn out to be statistically significant in the trade with the OECD countries, thus highlighting the possibility of the potential trade benefits associated with the trade policy reforms. The study is unique in that it empirically estimates the determinants of agricultural trade between the LDCs and developed countries and reveals the potential effectiveness of the preferential treatment and the implementation of the trade policy reforms.    

scholarly journals Foreign Aid and Trade Capacity Development Recent Evidence from Uganda

2016 ◽  
Vol 9 (3) ◽  
pp. 39
Author(s):  
Alex Thomas Ijjo ◽  
Isaac M. B. Shinyekwa
Keyword(s):  
Foreign Aid ◽  
Capacity Development ◽  
Developed Countries ◽  
External Trade ◽  
Least Developed Countries ◽  
Development Indicators ◽  
Side Constraints ◽  
The World ◽  
Aid For Trade ◽  
World Development

Endemic supply side constraints including fluctuating output levels, deficient trade infrastructure, rampant non-tariff barriers and incapacity to ensure international quality standards continue to thwart the gainful participation of many Least Developed Countries (LDCs) in an increasingly liberal global trade environment. At its 2005 Hong Kong Ministerial Conference, the World Trade Organization launched its Aid for Trade (AFT) initiative aimed at coordinating global financial support for strengthening trade capacity in Least Developed Countries (LDCs). This paper examined the effect of foreign aid, particularly Official Development Assistance, on Uganda’s external trade and its AFT component in strengthening the country’s trade capacity. Using time series Error Correction Modelling and the World Bank’s World Development Indicators and official national statistics, the paper finds small but positive aid influence on Uganda’s exports and imports and generally close alignment between aid and national priorities. However, given general aid volatility but more especially following the anti-homosexuality legislation and gross corruption allegations in the case of Uganda, the paper advises that external aid be treated as a supplement rather than a substitute for domestic financial resource mobilization in trade capacity development.

Structural Economic Vulnerability, Trade Policy and FDI Inflows

2017 ◽  
Vol 08 (01) ◽  
pp. 1750005 ◽  
Author(s):  
Sèna Kimm Gnangnon ◽  
Harish Iyer
Keyword(s):  
Trade Policy ◽  
Direct Investment ◽  
Developed Countries ◽  
Trade Policies ◽  
Least Developed Countries ◽  
Host Countries ◽  
Fdi Inflows ◽  
Economic Vulnerability ◽  
National Governments ◽  
The Empirical Analysis

This paper investigates two questions: first, how does countries' structural economic vulnerability (EVI) affect their foreign direct investment (FDI) inflows; second, how does EVI influence FDI inflows when host countries further liberalize their trade policies. The empirical analysis provides evidence that EVI influences negatively FDI inflows and that, in the context of greater trade policy liberalization, this vulnerability deters FDI only when it exceeds a certain threshold. These results call for enhanced cooperation between national governments and the international community to address developing countries, least-developed countries' EVI in order to ensure greater FDI inflows, which are critical for their economic development.

Trade openness and structural vulnerability in developing countries

2016 ◽  
Vol 43 (1) ◽  
pp. 70-89 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Trade Policy ◽  
Fixed Effects ◽  
Trade Openness ◽  
Developed Countries ◽  
Structural Vulnerability ◽  
Least Developed Countries ◽  
Structural Determinants ◽  
Entire Sample ◽  
Content Type

Purpose – The purpose of this paper is to investigate how trade openness affects the structural vulnerability of developing countries. The analysis is conducted on both the entire sample of 105 countries as well as two sub-samples, namely least developed countries (LDCs) and non-LDCs. Design/methodology/approach – To perform the analysis, the author employs fixed-effects (within) regressions supplemented by instrumental variables technique based on the two-step generalized methods of moments approach. Findings – The author finds empirical evidence that although trade policy liberalization reduces the structural vulnerability on the entire sample developing countries, no statistically significant effect of such liberalization is obtained either on LDCs or non-LDCs. However, trade policy liberalization appears to reduce countries’ exposure to shocks, result that applies to the entire sample as well as the two sub-samples. The author also observes that trade policy liberalization exerts no (statistically) significant effect on the size of shocks that affect developing countries, result that applies to both the full sample and the sub-samples of LDCs and non-LDCs. Research limitations/implications – In the absence of a well-established theoretical framework on how trade openness affects the structural vulnerability of developing, the author adopts a pragmatic approach by drawing upon many insights of Loayza and Raddatz (2007) who study the structural determinants of external vulnerability. Practical implications – Developing countries in general and LDCs in particular could address their structural weaknesses by making optimal use of their trade policies. In particular, they could better use the flexibilities available to them in provisions of the World Trade Organization (WTO)’ Agreements. In this respect, the international community, notably donors of the developed world has a key role to play. Originality/value – This is the first study exploring how trade openness, capturing here through trade policy liberalization affects the structural vulnerability of developing countries.

Sign in / Sign up

Export Citation Format

Share Document