An Analysis Of The Bilateral Trade Effects Of Japan’s Official Development Assistance On East African Countries

Foreign aid has always been a major concern for scholars at home and abroad,and the economic benefits of aid,especially the impact on bilateral trade,are the main concern,and it is increasingly necessary to study the relationship between aid and bilateral trade.After World War II,Japan started to provide official development assistance to Africa,and now the African region has become one of the major regions for Japanese aid.In recent years,East Africa has been the fastest growing region on the continent,with many countries including Kenya,Ethiopia,,Tanzania,Rwanda,Uganda and Burundi.2010-2017,East Africa’s real GDP growth rate averaged 6% per year,higher than the average for developing countries;in 2018-2019,East Africa’s economic growth rate exceeded that of Southeast Asia,leading the world’s subregions.Under the layout of Japan’s "Indo-Pacific Strategy",the importance of the East Africa region,which is near the West Coast of the Indian Ocean,has increased its importance in terms of political and economic,and the study of Japan’s assistance and trade relations has the necessity.This paper analyzes the relationship between Japan’s aid to the six East African countries and its bilateral trade through a stochastic frontier gravity model.The data of the selected six East African countries(Kenya,Tanzania,Ethiopia,Burundi,Rwanda,and Uganda)from 2001 to 2020 are analyzed based on the availability of data on aid and trade and other variables,and the main model uses the volume of aid and trade as the core explanatory The trade inefficiency model analyzes the effects of aid and other factors by using the main explanatory variables such as the degree of infrastructure construction,corruption,and economic freedom,and the results show that there is a positive relationship between Japan’s aid to the six East African countries and their bilateral trade,but Japan’s aid to East Africa is still insufficient in terms of economic and trade effects;at the same time,,it is also found that the level of national GDP and the size of population promote bilateral trade;among the non-efficiency factors,such as infrastructure capacity,government corruption and economic freedom also have an impact on bilateral trade.These factors are beneficial to the development of international trade.