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

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Author Info
Arslan Razmi () (Department of Economics, University of Massachusetts - Amherst)
Robert A. Blecker () (Department of Economics, American University)

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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://www.american.edu/academic.depts/cas/econ/workingpapers/2006-06.pdf
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Publisher 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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Related research
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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Find related papers by JEL classification:
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. William Milberg, 2007. "Exporting Processing Zones, Industrial Upgrading and Economic Development: A Survey," SCEPA Working Papers 2007-10, Schwartz Center for Economic Policy Analysis (SCEPA), The New School. [Downloadable!]
  2. William Milberg, 2007. "Shifting Sources and Uses of Profits: Sustaining U.S. Financialization with Global Value Chains," SCEPA Working Papers 2007-9, Schwartz Center for Economic Policy Analysis (SCEPA), The New School. [Downloadable!]
  3. Rodrigo Zeidan & Marcelo Resende, 2009. "Measuring Market Conduct in the Brazilian Cement Industry: A Dynamic Econometric Investigation," Review of Industrial Organization, Springer, vol. 34(3), pages 231-244, May. [Downloadable!] (restricted)
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