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Export Promotion Policies and the Crowding‐out Effect in Developing Countries

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  • Gairuzazmi Ghani

Abstract

Critics of export promotion policies have pointed out a fallacy of composition, where what is viable for a small country acting in isolation might not be viable when pursued by a group of countries simultaneously. This paper investigates the crowding‐out effect of the fallacy of composition; that is, whether developing countries that specialize in exports of manufactured products compete and crowd out one another's exports. The results of fixed‐effects panel estimation suggest that developing countries are not crowding out one another's exports. Instead, they are crowding out Western European countries’ exports of manufactured products.

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  • Gairuzazmi Ghani, 2006. "Export Promotion Policies and the Crowding‐out Effect in Developing Countries," Asian Economic Journal, East Asian Economic Association, vol. 20(3), pages 319-331, September.
    • Handle: RePEc:bla:asiaec:v:20:y:2006:i:3:p:319-331
    DOI: 10.1111/j.1467-8381.2006.00238.x
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