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2014/2 Danish Exports and Danish Bilateral Aid

Danish bilateral development assistance is aimed at reducing poverty in the partner countries. Even so, bilateral assistance may have secondary, or knock-on, effects, which are beneficial for Denmark. An important secondary effect is the prospect of increased export from Denmark to the partner countries. This Evaluation Study presents an econometric analysis of Danish exports to 144 countries over the period from 1981 to 2010.  

The analysis is based on the gravity model of bilateral trade; a structural model developed over decades and now the central model in analyses of bilateral trade flows and trade policies. The main result of the study is that Danish bilateral aid has a positive and statistically significant impact on Danish exports to the recipient countries.




Evaluation Department, Ministry of Foreign Affairs/Danida, Denmark


Henrik Hansen; John Rand, Development Economics Research Group and Department of Economics, University of Copenhagen