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Aid to the Services Sector: Does it Affect Manufacturing Exports?
Author(s) -
Ferro Esteban,
PortugalPerez Alberto,
Wilson John S.
Publication year - 2014
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12151
Subject(s) - downstream (manufacturing) , developing country , business , tertiary sector of the economy , service (business) , manufacturing sector , information and communications technology , exploit , variation (astronomy) , industrial organization , economics , trade in services , financial services , international economics , international trade , finance , economic growth , marketing , computer science , trade barrier , physics , computer security , world wide web , astrophysics
Abstract The authors evaluated the impact of foreign aid to five services sectors (transportation, information and communications technologies ( ICT ), energy, banking/financial services, and business services) on exports of downstream manufacturing sectors in developing countries. To address the reverse causality between aid and exports, they relied on an original identification strategy that exploits (i) the variation of aid flows to services sectors and (ii) the variation of service intensities across industrial sectors and countries using input–output data. They found a positive effect of aid to services, in general, on downstream manufacturing exports of developing countries across regions and income‐level groups.