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An Anatomy of Nepal's Remarkable Export Decline

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Abstract

This paper documents and breaks down a remarkable decline in Nepal's exports over the 2000-2019 period. This decline is due to a collapse in the country's top export products and is largely uniform across destinations and products. Furthermore, it is not on account of the poor global performance of the sectors Nepal was specialized in but is something more specific to Nepal. Industry-level statistics show that gross output increased in major exporting industries while value-added grew slower or declined. The increase in gross output together with the decline in exports implies a movement towards producing for domestic consumption using more imported inputs. These patterns are consistent with the expected effects of the surge in remittances Nepal experienced over this time period. Remittances would cause the economy to transition towards domestic consumption and re-orient domestic production accordingly.

Suggested Citation

  • Sharma, Rishi, 2022. "An Anatomy of Nepal's Remarkable Export Decline," Working Papers 2022-01, Department of Economics, Colgate University.
    • Handle: RePEc:cgt:wpaper:2022-01
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    File URL: https://digitalcollections.colgate.edu/node/6883
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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