Impact of aid for trade, foreign direct investment and remittances inflows on recipient-countries export quality

Abstract

This paper investigates empirically the impact of financial flows for development, including aid for trade, foreign direct investment (FDI) inflows and remittances inflows on the export quality of recipient-countries. The analysis is carried out over a sample of 118 countries, of which 34 least developed countries (LDCs), with data spanning the period 2002-2010. Results suggest that over the entire sample, AfT interventions and FDI inflows are conducive to overall export quality's improvement. In contrast, remittances inflows influence negatively overall export product quality. The analysis has also shown that for LDCs, there are different effects of these inflows on each of the three types of export product quality.