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Developing Country Exports of Manufactures: Moving Up the Ladder to Escape the Fallacy of Composition?

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  • Arslan Razmi

    ()
    (Department of Economics, University of Massachusetts - Amherst)

  • Robert A. Blecker

    ()
    (Department of Economics, American University)

Abstract

This paper tests for a ‘fallacy of composition’ by analysing the demand for exports of the 18 developing countries that are most specialised in manufactures in the markets of the 10 largest industrial countries. Estimated export equations (both time-series and panel data) suggest that most developing countries compete with other developing country exporters rather than with industrialised country producers. A smaller number of countries that export more high-technology products compete with industrialised country producers and also have higher expenditure elasticities for their exports. Thus, the fallacy of composition applies mainly to the larger group of countries exporting mostly low-technology products.

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File URL: http://w.american.edu/cas/economics/repec/amu/workingpapers/2006-06.pdf
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Bibliographic Info

Paper provided by American University, Department of Economics in its series Working Papers with number 2006-06.

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Length: 46 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:amu:wpaper:0606

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Web page: http://www.american.edu/cas/economics/

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Keywords: Developing country exports of manufactures; intra-developing country competition; fallacy of composition; real exchange rates; technological ladder; adding-up constraint.;

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References

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Citations

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Cited by:
  1. Saygılı, Hülya & Saygılı, Mesut, 2011. "Structural changes in exports of an emerging economy: Case of Turkey," Structural Change and Economic Dynamics, Elsevier, vol. 22(4), pages 342-360.
  2. William MILBERG & Deborah WINKLER, 2011. "Economic and social upgrading in global production networks: Problems of theory and measurement," International Labour Review, International Labour Organization, vol. 150(3-4), pages 341-365, December.
  3. Giorgia Giovannetti & Marco Sanfilippo, 2009. "Do Chinese Exports Crowd-out African Goods? An Econometric Analysis by Country and Sector," The European Journal of Development Research, Palgrave Macmillan, vol. 21(4), pages 506-530, September.
  4. Khan, Haider A, 2010. "Development Strategies: Lessons from the Experiences of South Korea, Malaysia, Thailand and Vietnam," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  5. Rodrigo M. Zeidan & Marcelo Resende, 2005. "Measuring Market Conduct in the Brazilian Cement Industry: a Dynamic Econometric Investigation," Economics Working Papers ECO2005/13, European University Institute.
  6. Khan, Haider, 2013. "Industrialization and Development Strategies in the 21st Century: Towards Sustainable Innovation Systems," MPRA Paper 50168, University Library of Munich, Germany.
  7. Razmi, Arslan, 2007. "Pursuing manufacturing-based export-led growth: Are developing countries increasingly crowding each other out?," Structural Change and Economic Dynamics, Elsevier, vol. 18(4), pages 460-482, December.
  8. Tronzano, Marco, 2010. "Reassessing the Dynamic Links between Trade and Growth: New Empirical Evidence from India - Un riesame delle relazioni tra commercio estero e crescita economica:nuova evidenza empirica per l’India," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 63(2), pages 217-244.
  9. Khan, Haider A., 2011. "Lessons from Korean development experience," MPRA Paper 39387, University Library of Munich, Germany.
  10. Porcile, Gabriel & de Souza, Alexandre Gomes & Viana, Ricardo, 2011. "External debt sustainability and policy rules in a small globalized economy," Structural Change and Economic Dynamics, Elsevier, vol. 22(3), pages 269-276, September.
  11. Robert A. Blecker & Arslan Razmi, 2009. "Export-led growth, real exchange rates and the fallacy of composition," Working Papers 2009-22, American University, Department of Economics.
  12. Khan, Haider, 2013. "Bangladesh: Towards a Non-partisan Search for a Pro-people National Political Economic Strategy during Crisis," MPRA Paper 49518, University Library of Munich, Germany.

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