Can Foreign Aid Spur Growth? Empirical evidence from the developing world between 1978 and 2013
(2016) NEKN01 20161Department of Economics
- Abstract (Swedish)
- This study aims to investigate the impact of foreign aid on economic growth by using an exogenous instrument identified by Galiani et al. (2015). Researchers have through the years failed to agree on whether aid causes growth, being unable to identify an exogenous instrument that can eliminate the endogeneity problem associated with aid and growth. Galiani et al. (2015) claim to have found such an instrument and this study draws inspiration from their research aiming to test the robustness of their findings. It is found that there is a statistically significant causal relationship and that a one percentage point increase of aid relative to GDP per capita increases growth by 0.029 – 0.037 percentage points. The finding appears quite robust... (More)
- This study aims to investigate the impact of foreign aid on economic growth by using an exogenous instrument identified by Galiani et al. (2015). Researchers have through the years failed to agree on whether aid causes growth, being unable to identify an exogenous instrument that can eliminate the endogeneity problem associated with aid and growth. Galiani et al. (2015) claim to have found such an instrument and this study draws inspiration from their research aiming to test the robustness of their findings. It is found that there is a statistically significant causal relationship and that a one percentage point increase of aid relative to GDP per capita increases growth by 0.029 – 0.037 percentage points. The finding appears quite robust through sensitivity analysis and different model specifications. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8876176
- author
- Eriksson, Robin LU
- supervisor
- organization
- course
- NEKN01 20161
- year
- 2016
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- foreign aid, economic growth, development, two stage least squares, panel data
- language
- English
- id
- 8876176
- date added to LUP
- 2016-06-22 14:26:23
- date last changed
- 2016-06-22 14:26:23
@misc{8876176, abstract = {{This study aims to investigate the impact of foreign aid on economic growth by using an exogenous instrument identified by Galiani et al. (2015). Researchers have through the years failed to agree on whether aid causes growth, being unable to identify an exogenous instrument that can eliminate the endogeneity problem associated with aid and growth. Galiani et al. (2015) claim to have found such an instrument and this study draws inspiration from their research aiming to test the robustness of their findings. It is found that there is a statistically significant causal relationship and that a one percentage point increase of aid relative to GDP per capita increases growth by 0.029 – 0.037 percentage points. The finding appears quite robust through sensitivity analysis and different model specifications.}}, author = {{Eriksson, Robin}}, language = {{eng}}, note = {{Student Paper}}, title = {{Can Foreign Aid Spur Growth? Empirical evidence from the developing world between 1978 and 2013}}, year = {{2016}}, }