"Aid for Trade" Effectiveness? Micro-level Evidence from Nepal

This paper considers the extent to which the 'Aid for Trade' (AfT) initiative has been effective in promoting improved export outcomes at the firm level. Specifically, the paper uses geo-referenced data on AfT projects from the AidData database and firm activity from a survey of nearly 150 exporting firms in Nepal to spatially identify impacts of the projects on export performance. We find qualified evidence that proximity to (more) AfT projects improves export performance but that some projects may be more effective than others. These findings are supplemented by interviews with 21 exporting firms. The results suggest that the research approach could be utilized more broadly to draw more generalized conclusions about AfT and firm export performance.