Recent studies offer an ambiguous picture on the effectiveness of foreign aid in strengthening the export capacity of recipient countries. Moreover, the literature on aid for trade (AfT) has often neglected that exporters in the donor countries may be among the main beneficiaries. We hypothesize...

We analyze whether foreign direct investment (FDI) has contributed to the typically wide income gaps in five Latin American host countries. We perform country-specific and panel cointegration techniques to assess the long-run impact of inward FDI stocks on income inequality among households in...

Our empirical estimations indicate that aid-for-trade granted by OECD donors strengthens the trade relations of recipient countries with other developing countries. By focusing on South-South trade we mitigate endogeneity concerns that have plagued analyses of trade between recipients and donors...

Considering that primary commodity dependence continues to be a major problem of various lower income countries, we analyze whether Aid for Trade (AfT) has helped recipient countries upgrade and diversify their exports. Estimating an asymmetric and aggregated gravity model, we find that AfT has...

Recent studies offer an ambiguous picture on the effectiveness of foreign aid in strengthening the export capacity of recipient countries. Moreover, the literature on aid for trade (AfT) has often neglected the fact that exporters in the donor countries may be among the main beneficiaries. We...

Our empirical estimations indicate that Aid for Trade (AfT) granted by OECD donors strengthens the trade relations of recipient countries with other developing countries. By focusing on South-South trade, we mitigate endogeneity concerns that have plagued analyses of trade between recipients and...

This paper analyzes whether foreign direct investment (FDI) has contributed to the wide income gaps in Latin America. Panel cointegration techniques as well as regression analysis are performed to assess the impact of inward FDI stocks on income inequality among households in Latin American host...

Several recent papers argue that contracts provide reference points that affect ex post behavior. We test this hypothesis in a canonical buyer-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant and...

We present an international trade model with multiproduct firms. Firms are heterogeneously endowed with two types of capabilities that jointly determine the trade-off within firms between managing a large portfolio of products and producing at low marginal cost. The model can explain many of the...

This paper reports data from a laboratory experiment on two-period moral hazard problems. The findings corroborate the contract-theoretic insight that even though the periods are technologically unrelated, due to incentive considerations principals can benefit from offering long-term contracts...