Export Demand Elasticities as Determinants of Growth: Estimates for Mauritius
AbstractIn this paper, we combine the export-led and import-led growth hypotheses in a growth model in which the importation of foreign capital goods and the demand elasticities of own export products explain the growth opportunities and the technical progress of developing countries. This model, based on imported capital goods uses Mauritius' data on capital investment, employment, export partners' growth and terms of trade to estimate price and income elasticities of export demand, total-factor productivity growth and economies of scale. These elasticities are then used to assess how the growth in export partners' income is converted into domestic growth. The implications of the presence of low or high export demand elasticities are discussed by relating them to various strands of trade and growth literature. Based on the results of this estimation, we also calculate steady-state growth rates, engine and handmaiden effects of growth as well as the dynamic steady-state gains from trade for this latecomer export economy. The implications of steady state results are also discussed in the light of the Mauritian employment and growth perspectives.
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Bibliographic InfoPaper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number 072.
Date of creation: 2008
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growth models; trade; capital goods; exports; total factor productivity;
Other versions of this item:
- Alexis Habiyaremye & Thomas H. W. Ziesemer, 2012. "Export demand elasticities and productivity as determinants of growth: estimates for Mauritius," Applied Economics, Taylor and Francis Journals, vol. 44(9), pages 1143-1158, March.
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
- NEP-AFR-2008-12-14 (Africa)
- NEP-ALL-2008-12-14 (All new papers)
- NEP-DEV-2008-12-14 (Development)
- NEP-EFF-2008-12-14 (Efficiency & Productivity)
- NEP-INT-2008-12-14 (International Trade)
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