Giorgio Barba Navaretti (University of Milano and Centro Studi Luca d’Agliano) Riccardo Faini (Italian Ministry of Economy; University of Brescia; IZA and CEPR) Bernard Gauthier (HEC Montréal)
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This paper examines the impact of trade and fiscal reforms and of the 1994 devaluation of the CFA franc on enterprise development in Chad and Gabon. These reforms provide a natural experiment to assess the impact of trade liberalisation in countries with a small and backward manufacturing sector. The empirical analysis is based on a new panel data base covering virtually the whole population of manufacturing firms in Chad and Gabon, and containing data spanning from the year before to two years after the reforms. The paper finds that although firms’ response to changing incentives was non-negligible, with a shift of output from non tradable to tradable and an increase in productivity, the reform process was unable to generate a virtuous and self-sustained circle, where export expansion brings a generalized productivity increase which in turn feeds on further export growth.
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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number
176.
Find related papers by JEL classification: O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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