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Export Processing Zones, Backward Linkages and Unemployment

Author

Listed:
  • Yabuuchi, Shigemi

    (Nagoya City University)

Abstract

This paper investigates the effects of export processing zones (EPZs) on factor rewards, national income and the output of the domestic intermediate good producing sector (backward linkage effect) in surpluslabor developing countries. It is shown that if the intermediate good is internationally traded, an increase in foreign capital investment in the EPZs will not change factor rewards and then national income irrespective of the existence of unemployment. It is also shown that, contrary to the conventional wisdom, an increase in foreign capital investment decreases production of the intermediate good and increases unemployment. The effects of factor accumulation on outputs and unemployment are also examined.

Suggested Citation

  • Yabuuchi, Shigemi, 2003. "Export Processing Zones, Backward Linkages and Unemployment," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 360-371.
    • Handle: RePEc:ris:integr:0238
    as

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    More about this item

    Keywords

    Export processing zone; Backward linkage; Unemployment;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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