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Liberalization and Structural Change: Evidence from Nepalese Manufacturing

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  • Kishor Sharma
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    Abstract

    The consequences of liberalization on structural changes are examined using data from manufacturing industry in Nepal which is classified as a least developed country. This is important because doubts that liberalization may not solve the problems of low-income developing countries remain strong due mainly to low supply elasticities and the early stage of industrialization. Results suggest some structural changes in manufacturing output and trade orientation. However, no significant improvements were recorded in the overall productivity growth and spatial distribution of manufacturing which appear to be due mainly to the lack of basic infrastructure and the shortage of skilled manpower. Thus, appropriate investment policies, which channel resources to improve human capital and infrastructure, appear to be essential if the potential benefits of liberalization are to be fully achieved.

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    File URL: http://www.econ.yale.edu/growth_pdf/cdp812.pdf
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    Bibliographic Info

    Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 812.

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    Length: 26 pages
    Date of creation: Apr 2000
    Date of revision:
    Handle: RePEc:egc:wpaper:812

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    Related research

    Keywords: liberalization; import penetration; export intensity; total factor productivity growth; Nepal.;

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    1. Dani Rodrik, 1988. "Closing the Technology Gap: Does Trade Liberalization Really Help?," NBER Working Papers 2654, National Bureau of Economic Research, Inc.
    2. Srinivasan, T.N. & Bhagwati, J., 1999. "Outward-Orientation and Development: Are Revisionist Right?," Papers 806, Yale - Economic Growth Center.
    3. Stein, Howard, 1992. "Deindustrialization, adjustment, the World Bank and the IMF in Africa," World Development, Elsevier, vol. 20(1), pages 83-95, January.
    4. T. N. Srinivasan & Jagdish Bhagwati, 1999. "Outward-Orientation and Development: Are Revisionists Right," Working Papers 806, Economic Growth Center, Yale University.
    5. Rodnik, Dani, 1992. "Conceptual issues in the design of trade policy for industrialization," World Development, Elsevier, vol. 20(3), pages 309-320, March.
    6. Kishor Sharma & Sisira Kumara Jayasuriya & Edward Oczkowski, 1997. "Liberalization and Productivity Growth: The Case of Manufacturing Industry in Nepal," Working Papers 1997.16, School of Economics, La Trobe University.
    7. Dijkstra, A. Geske, 1996. "The impact of structural adjustment programs on manufacturing: Lessons from Nicaragua," World Development, Elsevier, vol. 24(3), pages 535-547, March.
    8. Bhagwati, Jagdish N, 1988. "Export-Promoting Trade Strategy: Issues and Evidence," World Bank Research Observer, World Bank Group, vol. 3(1), pages 27-57, January.
    9. Dani Rodrik, 1992. "The Limits of Trade Policy Reform in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 87-105, Winter.
    10. Nishimizu, Mieko & Robinson, Sherman, 1984. "Trade policies and productivity change in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 16(1-2), pages 177-206.
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    Cited by:
    1. Mihir Pandey, 2004. "Impact of trade liberalisation in manufacturing industry in India in the 1980s and 1990s," Indian Council for Research on International Economic Relations, New Delhi Working Papers 140, Indian Council for Research on International Economic Relations, New Delhi, India.

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