Urban Development and Aid Effectiveness: Examining Their Impact on Export Performance in Sub-Saharan African Countries

Abstract

ABSTRACT

Trade is the most important factor for any country because it can strengthen the economic position of that country. The countries that are deeply involved in goods and services export will have greater control over their economic condition. In this study, we investigate the relationship between Urban development and Trade with the moderating effect of Aid effectiveness. Some control variables are also taken to investigate the trade and urban development relationship. This study contributes to the current studies on trade and urban development. Using panel data from 36 sub-Saharan African countries between the period 2008 and 2020, we used the panel threshold regression model with a difference generalized method of moments (GMM). We discover that urban population growth has a significant negative effect on goods and services export, with a negative coefficient value, indicating that exports are projected to decrease by 0.12 units for every one-unit increase in urban population. Regression analysis reveals statistical significance in the relationship between trade and urban development. Furthermore, cross-sectional dependencies and slope homogeneity analysis show significant variation in structural breaks and slope coefficients between trade and urban development. The goal of the study is to offer insights to institutions, policymakers, and researchers to better understand how technical cooperation grants moderate the relationship between export performance and urban population and also to provide insights on creating effective sustainable development plans.