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Trade Liberalization And The Manufacturing Sector: The Case Of The Small Developing Country

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  • Denny Lewis-Bynoe
  • Jennifer Griffith
  • Winston Moore

Abstract

Historically, the lack of competition in developing countries has resulted in highly concentrated domestic industries that suffer from diseconomies of scale but prosper behind high walls of protection. Liberalization is expected to reverse this trend but at what cost? This article utilizes an import demand framework to examine the potential impact of trade liberalization on the manufacturing sector in the Caribbean using the case of Barbados. The results indicate that the manufacturing industry could encounter tremendous price competition, which could compromise the future survival of these industries. The study recommends that industries reorganize production processes to increase efficiency, which will allow them to compete effectively in the new global trading environment. These results may also be applicable to the wider Caribbean. Copyright 2002 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 20 (2002)
Issue (Month): 3 (07)
Pages: 272-287

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Handle: RePEc:bla:coecpo:v:20:y:2002:i:3:p:272-287

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Cited by:
  1. Syed Abdul Sattar SHAH & Anwar Ali Shah G. SYED & Faiz M. SHAIKH, 2013. "Effects Of Wto On The Textile Industry On Developing Countries," Romanian Statistical Review, Romanian Statistical Review, vol. 61(6), pages 60-77, July.
  2. Baggs, Jennifer & Brander, James A., 2005. "Trade Liberalization, Profitability, and Financial Leverage," Analytical Studies Branch Research Paper Series 2005256e, Statistics Canada, Analytical Studies Branch.
  3. Ali, Syed Zahid & Anwar, Sajid & Valadkhani, Abbas, 2012. "Macroeconomic consequences of increased productivity in less developed economies," Economic Modelling, Elsevier, vol. 29(3), pages 621-631.
  4. Syed Zahid Ali & Sajid Anwar, 2005. "Trade Liberalization under New Realities," Trade Working Papers 22243, East Asian Bureau of Economic Research.
  5. Baggs, Jennifer & Brander, James A., 2005. "Liberalisation des echanges, rentabilite et levier financier," Direction des etudes analytiques : documents de recherche 2005256f, Statistics Canada, Direction des etudes analytiques.

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