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The purpose of this paper is to present a review of empirical evidence on the effectiveness of Aid for Trade (AfT) inflows and recommend new areas of interest concerning the initiative other than its effect on trade performance.

This paper reviews a sample of 55 studies over the past 11 years. Besides, this paper categorised the reviewed empirical studies into three groups: the works concentrating on the trade performance effect; the works focusing on other economic factors effect; and the works concerning the allocation effect of these inflows. This paper also offers a detailed analysis of the multiple empirical methods, sources of data, coverage of the countries and forms of AfT inflows used in the reviewed literature.

Key findings indicated that AfT has overall produced a successful impact as reported by most studies. Moreover, it has been highlighted that the effectiveness of AfT may differ relying on multiple indicators: the category of AfT disbursements; income of the recipient country; the recipient country's geographical region; the amount of aggregate AfT as well as its main categories; the policy regulation and institutional quality of the recipient country; and the degree of liberalisation in the recipient country.

This paper is special in that it is the first to publish a comprehensive narrative analysis of 55 empirical pieces of evidence on the effectiveness of AfT over the past 11 years. It is also the first paper to review the previous literature regarding the effectiveness of AfT inflows on other non-trade outcomes, as well as trade outcomes in one single study. The outcome of the survey reveals new areas of interest in the effectiveness of AfT aside from trade performance.

Taking departure in the premise that donor and recipient priorities differ with regard to the marginal costs and benefits associated with attacking global environmental externalities, and hence the relative importance attached to the global environment, this paper seeks to scrutinize specific global environmental transfer mechanisms in the light of proposed definitions of global environmental assistance and global environmental compensation. It is argued that most global environmental transfer mechanisms possess distinct compensatory elements, and that additionality of these transfers is essential in order to ensure that existing development assistance is not crowded out. Specifically, this should be achieved either directly through separation of funds for global environmental and local developmental purposes or indirectly through increased considerations for local development objectives directly in global environmental transfer design.

In a global environment where terrorist organisations based in a poor country target a rich nation, this paper aims to study the properties of a dynamically incentive compatible contract designed by the target nation that involves joint counter-terror tasks with costly participation by each country. The counter-terror operations are however subject to ex post moral hazard, so that to incentivise counter-terror, the rich country supplies developmental aid. Development aid also helps avoid unrest arising from counter-terror activities in the target nation. However, aid itself can be diverted to non-developmental projects, generating a novel interlinked moral hazard problem spanning both tasks and rewards.

The authors use a dynamic model where the aid giving countries and aid receiving countries behave strategically. Then they solve for the sub game perfect Nash equilibrium of this game.

The authors characterise the optimal contract, showing that the dynamic structure of counter-terror resembles the shock-and-awe discussed by military strategists. The authors then prove that it is not necessarily the case that a more hawkish (resp. altruistic) donor is less pro-development (resp. softer on terror). In addition, the authors show that it may be easier to contract for higher counter-terror inputs when the recipient is more sympathetic to terrorists. The authors also discuss other problems faced by developing nations where this model can be readily adopted and the results can endorse appealing policy implications.

The authors characterise the optimal contract, showing that the dynamic structure of counter-terror resembles the shock-and-awe discussed by military strategists. It is proved that it is not necessarily the case that a more hawkish (resp. altruistic) donor is less pro-development (resp. softer on terror). In addition, the authors show that it may be easier to contract for higher counter-terror inputs when the recipient is more sympathetic to terrorists. Other problems faced by developing nations are also discussed where this model can be readily adopted, and the results can endorse appealing policy implications. These results have important policy implications, in particular in today’s world.

This chapter highlights the characteristics of Asia through the analysis of policy-related documents by five donor countries, namely Japan, South Korea, China, India and Thailand. It will also examine the roles played by regional bodies such as the Southeast Asian Ministers of Education Organization (SEAMEO) and ASPBAE (the Asia South Pacific Association for Basic and Adult Education) as the horizontal channels influencing aid policies in respective countries. Together with the analysis of the national and organizational policies, the regional process of building consensus on the post-2015 agenda is examined, with a particular focus on the Asia-Pacific Regional Education Conference (APREC) held in August 2014.

The analysis reveals that the region has two faces: one is imaginary and the other is functional. There is a common trend across Asian donors to refer to their historical ties with regions and countries to which they provide assistance and their traditional notions of education and development. They highlight Asian features in contrast to conventional aid principles and approaches based on the Western value system, either apparently or in a muted manner. In this sense, the imagined community of Asia with common cultural roots is perceived by the policymakers across the board.

At the same time, administratively, the importance of the region as a stage between the national and global levels is recognized increasingly in the multilateral global governance structure. With this broadened participatory structure, as discussed in the chapter ‘Post-EFA Global Discourse: The Process of Shaping the Shared View of the ‘Education Community’’, the expected function of the region to transmit the norms and requests from the global level and to collect and summarize national voices has increased.

We combine a key issue in development economics (explaining core-periphery patterns) for the first time with an analysis of unilateral transfers (foreign aid) using a New Economic Geography model. We show that (i) direct transfer paradoxes are not possible in a symmetric setting even if a bystander is present, (ii) the effects of foreign aid depend on the level of economic integration, (iii) aid only has a temporary effect (even if there is a bystander present) if the initial equilibrium is stable, and (iv) the recipient as well as the bystander benefits from foreign aid if the donor is large.

This paper enhances our understanding of how national culture impacts manufacturing performance (assembly speed, consistency between teams, etc.) during a production process move. The authors also investigate the efficacy of co-location as a strategy to enhance knowledge transfer from one organization to another.

To study the impact of national culture on production process moves, the authors develop and employ a team-based behavioral experiment within and between an individualist society (the United States) and a collectivist one (China). The authors also examine the impact of co-location on knowledge transfer effectiveness within and between these two unique cultures.

Interestingly, co-location has little impact on the performance of US recipient teams. Without co-location, Chinese recipient team performance lags significantly behind the US teams. However, firms can overcome these knowledge transfer challenges by co-locating source and recipient team members. These results suggest that firms should assess the national cultural context when considering co-location to manage their production move. There are contexts where co-location may be incredibly useful to facilitate an effective knowledge transfer (e.g. collectivist cultures like China) and contexts where this approach may not be as valuable (e.g. individualistic cultures such as the United States).

This research contributes to the academic literature in several ways. First, while past research demonstrates that national culture can be an essential barrier to information and knowledge sharing, this paper extends these findings showing that co-location may effectively overcome this barrier. After the authors offer and test the merits of co-location, they also establish the boundary conditions of this approach by showing that the effect of co-location on knowledge transfer is contingent on the cultural context. This contribution enhances our understanding of the relationship between national culture and knowledge sharing and has implications for managers developing approaches to transfer knowledge between cultures. Second, the authors develop and execute a novel cross-country experimental design. While cross-country experiments have been done before (e.g. Ozer et al. 2014, Kuwabara et al. 2007, etc.), it is still rare to see such experiments due to them being “technically difficult and costly” (Ozer et al. 2014, p. 2437). This research not only offer insights into how teams of people from individualist and collectivist societies send, receive and comprehend production knowledge. It also documents how these teams convert this knowledge into production results.

The existing literature on aid for trade (AfT) tends to support the effectiveness of AfT in improving trade capacities and enhancing the export performance of recipient countries. While aid directed at trade-related infrastructure (e.g. ports and roads) is reported to drive the overall effect of AfT, the increasing importance of labor market flexibility and informal labor in export environment has been largely overlooked. The purpose of this paper is to test two hypotheses regarding the relationship between labor market flexibility, exports and AfT. First, flexible labor regulation promotes exports by reducing adjustment costs related to the export process. Second, for informal labor-intensive export sectors, AfT effectiveness may be compromised by the contraction of the informal sector due to labor deregulation as it deteriorates comparative advantage that supports recipients’ export competitiveness.

Since first introduced by Tinbergen (1962), the gravity model has been widely used to analyze bilateral trade, and its usefulness has been verified in several prominent empirical studies (e.g. Anderson and van Wincoop, 2003; Helpman et al., 2008). However, despite the empirically successful framework of the gravity model, the standard gravity equation may not be appropriate for estimating the effect of AfT in the paper. The main interest lies in whether aggregate AfT flows enhance the export “performance” of individual recipients, that is, whether they improve the recipients’ total exports rather than their bilateral exports. For this purpose, the authors took aggregated approach to the gravity model from Anderson and van Wincoop (2003).

The findings suggest that while both AfT and labor market flexibility are positively associated with higher export levels, the export-promoting effect of AfT is marginally reduced by the contraction of informal workforce. These findings, however, only hold for export sectors that heavily rely on informal labor force, that is, primary commodities and resource/labor-intensive goods. The authors also find that these effects are stronger in low-income countries, indicating that the AfT initiative has been effective where it is needed the most.

This paper is the first attempt to analyze the relationship between AfT and exports with consideration of labor market flexibility. Using the data for 85 recipient countries, the authors test the following hypotheses. First, labor market flexibility promotes exports by reducing adjustment costs related to the exporting process. Second, the contraction of the informal sector due to labor deregulation deteriorates developing countries’ comparative advantage in certain export sectors. Hence, while both AfT and labor market flexibility are expected to enhance the export volume of developing countries, the loss from weaker comparative advantage in a form of smaller informal labor force can exceed the gains from AfT in certain sectors.

This paper aims to examine the effect of development aid volatility on foreign direct investment (FDI) volatility in aid recipient countries.

The empirical analysis has relied on a sample of 117 countries over the period 1981–2016 and used the two-step system generalized methods of moments (GMM) approach.

The findings indicate that development aid volatility exerts a positive and significant effect on FDI volatility, with the magnitude of this positive effect rising as countries’ real per capita income increases. Furthermore, development aid volatility is non-linearly related to FDI volatility, as additional rises in the degree of development aid volatility further amplify FDI volatility.

These outcomes highlight that volatility of development aid inflows enhances the volatility of FDI inflows. Thus, the enhancement of the aid coordination system between donor-countries and recipient-countries would not only help mitigate the volatility of aid – which reduces the macroeconomic effectiveness of aid – but also stabilizes FDI inflows to developing countries.

A limitation of the present paper is its reliance on aggregate FDI inflows to perform the analysis. Availability of data on greenfield FDI inflows and cross-border mergers and acquisitions FDI inflows over a long-time-period would provide an opportunity to conduct an in-depth analysis of the volatility of development aid on FDI inflows volatility. Furthermore, it could be interesting to investigate in the future (if data is available) the extent to which aid coordination systems between donor-countries and recipient-countries versus recipient-countries’ domestic factors contribute to explaining the dynamics of FDI inflows volatility in recipient-countries of these two types of capital flows.

To the best of the authors’ knowledge, this topic has not been addressed in the literature.

The impact of expatriates on recipient staff may be highly significant in technology transfer. However, the impact may vary according to the behavior pattern of expatriates as well as factors contingent upon the situation. Utilizing leadership theory under a contingent framework, the development of recipient staff was predicted in this study from the expatriate behavior characteristics. Several hypotheses on the performance improvement of recipient staff suggest the main effects of expatriate's consideration and structural characteristics, and moderating effects due to expatriate's language capability and recognition by the local staff. Data for testing these hypotheses were collected by administering a questionnaire. The results of basic multiple regression analysis indicated the influence of both consideration and structural characteristics of expatriates on performance improvement of the recipient staff. Also, results of the moderated multiple regression analysis suggested that the expatriate's consideration characteristics are highly effective in ameliorating possible negative effects of a low recognition for performance improvement of the recipient staff even when the expatriate is a poor communicator.