Is there persistence in the growth of manufactured exports? Evidence from newly industrializing countries
AbstractPrice and income elasticities estimated from a country's export demand function are used both to predict and to prescribe effective export strategies. But the focus on elasticities has led to the neglect of an important empirical regularity: a strong persistencein the growth rate of a country's exports. The authors shift the spotlight to this phenomenon and describe the degree and pattern of persistence. They find that a country's exports are influenced not only by the elasticities, but also by the quality of its transactional infrastructure (proxied by the penetration of telecommunications). More important, when world income rises, exports rise relatively uniformly for different country groups. As world income contracts, the decline in exports is greater and is especially sharp for certain countries. The authors infer from this asymmetry in income elasticity of demand, and from the observed persistence of exports, that long-term buyer supplier relationships lead to the creation of"insiders"and"outsiders"in the world market for manufactured goods, a condition that tends to perpetuate itself.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Development Economics.
Volume (Year): 53 (1997)
Issue (Month): 2 (August)
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Other versions of this item:
- Mody, Ashoka & Yilmaz, Kamil & DEC, 1994. "Is there persistence in the growth of manufactured exports? Evidence from newly industrializing countries," Policy Research Working Paper Series 1276, The World Bank.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
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