This paper evaluates the effects of subnational development aid projects from China and the World Bank on firm performance and considers the role of supply-side constraints of the firms as channels of transmission. We find that Chinese official development assistance (ODA) projects increase firm sales: a 1% increase in Chinese ODA commitments increases firm sales growth by 3%. Moreover, we find some evidence that Chinese ODA intervention crowds out local firms operating in the mineral sector, which is one of the most financed by China. We show that the positive effect of Chinese aid is stronger for firms lacking access to finance, suggesting that Chinese aid may improve firm performance by releasing a firm's financing constraints. Finally, we find no causal effects between World Bank projects and firm performance.

Marchesi, S., Masi, T., Paul, S. (2025). Aid Projects and Firm Performance. ECONOMIC DEVELOPMENT AND CULTURAL CHANGE, 73(3), 1251-1295 [10.1086/730829].

Aid Projects and Firm Performance

Marchesi, S
;
Masi, T;
2025

Abstract

This paper evaluates the effects of subnational development aid projects from China and the World Bank on firm performance and considers the role of supply-side constraints of the firms as channels of transmission. We find that Chinese official development assistance (ODA) projects increase firm sales: a 1% increase in Chinese ODA commitments increases firm sales growth by 3%. Moreover, we find some evidence that Chinese ODA intervention crowds out local firms operating in the mineral sector, which is one of the most financed by China. We show that the positive effect of Chinese aid is stronger for firms lacking access to finance, suggesting that Chinese aid may improve firm performance by releasing a firm's financing constraints. Finally, we find no causal effects between World Bank projects and firm performance.
Articolo in rivista - Articolo scientifico
Aid effectiveness, World Bank projects, Chinese projects, Geo-coding, Firm growth
English
2024
2025
73
3
1251
1295
none
Marchesi, S., Masi, T., Paul, S. (2025). Aid Projects and Firm Performance. ECONOMIC DEVELOPMENT AND CULTURAL CHANGE, 73(3), 1251-1295 [10.1086/730829].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/305272
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