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A comment on the optimal structure of Export-Processing free Zones

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  • Trond-Arne Borgersen

Abstract

This paper comments on the industrial structure of developing countries' Export-Processing free Zones (EPZs). As developing countries are exposed to irrecoverable entry costs in international markets, the relationship between export supply and exchange rates has been shown to be persistent. In addition to hampering entry, the market entry costs thus complicate export supply responses. As the form of persistence varies between industry structures, market entry costs might also affect EPZ optimal industry structure. To create successful export promotion programs through EPZ, these differences should be taken into account. This paper comments on how different export industry structures create export revenues and backward linkages, two of the main objectives of EPZ.

Suggested Citation

  • Trond-Arne Borgersen, 2008. "A comment on the optimal structure of Export-Processing free Zones," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 1(2), pages 107-117.
    • Handle: RePEc:ids:ijtrgm:v:1:y:2008:i:2:p:107-117
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