This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

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

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Arslan Razmi () (University of Massachusetts Amherst)
Robert Blecker (American University)

Additional information is available for the following registered author(s):

Abstract

The possible existence of a "fallacy of composition" in the simultaneous pursuit of export-led growth by developing countries has received relatively little attention in economic literature. This lack of attention becomes even more apparent in the domain of empirical studies of manufactured exports. This essay seeks to fill this gap. It develops a data set consisting of 10 industrial and 18 developing countries. Carefully designed relative price indices are constructed to capture price and quantity determinants of industrialized country demand for developing country exports. Export equations are then estimated for individual countries. The estimated coe±cients suggest that most developing countries that report significant price effects compete with other developing country exporters, and not with manufacturers in the industrial countries. The panel estimates provide further support in addition to indicating that differences in the nature of competition among developing countries and between developing and industrial countries underline the need to take into account these nuances of international competition. The overall results suggest major policy concerns for developing countries as they simultaneously attempt to export their way to growth through price- and wage-based competition. JEL Categories: F02, F14, F19

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.umass.edu/economics/publications/2005-02.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by University of Massachusetts Amherst, Department of Economics in its series Working Papers with number 2005-02.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Feb 2005
Date of revision: May 2006
Handle: RePEc:ums:papers:2005-02

Contact details of provider:
Postal: Thompson Hall, Amherst, MA 01003
Phone: (413)545-2590
Fax: (413)545-2921
Email:
Web page: http://www.umass.edu/economics
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Peter Skott).

Related research
Keywords: Fallacy of composition; export-led growth; adding-up constraints; external demand; manufactured exports; intra-developing country competition; Bewley transformation; wage suppres- sion.;

Other versions of this item:

This paper has been announced in the following NEP Reports: References listed on IDEAS
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. Cline, William R., 1982. "Can the East Asian model of development be generalized?," World Development, Elsevier, vol. 10(2), pages 81-90, February. [Downloadable!] (restricted)
  2. Spilimbergo, Antonio & Vamvakidis, Athanasios, 2003. "Real effective exchange rate and the constant elasticity of substitution assumption," Journal of International Economics, Elsevier, vol. 60(2), pages 337-354, August. [Downloadable!] (restricted)
    Other versions:
  3. Lall, Sanjaya & Albaladejo, Manuel, 2004. "China's Competitive Performance: A Threat to East Asian Manufactured Exports?," World Development, Elsevier, vol. 32(9), pages 1441-1466, September. [Downloadable!] (restricted)
    Other versions:
  4. Lall, Sanjaya, 1998. "Exports of Manufactures by Developing Countries: Emerging Patterns of Trade and Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 54-73, Summer.
  5. Hertel, Thomas W. & Terrie Walmsley, 2000. "China's Accession to the WTO: Timing is Everything," GTAP Working Papers 403, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
    Other versions:
  6. Riedel, James, 1988. "The Demand for LDC Exports of Manufactures: Estimates from Hong Kong," Economic Journal, Royal Economic Society, vol. 98(389), pages 138-48, March. [Downloadable!] (restricted)
  7. Shigehisa Kasahara, 2004. "The Flying Geese Paradigm: A Critical Study Of Its Application To East Asian Regional Development," UNCTAD Discussion Papers 169, United Nations Conference on Trade and Development. [Downloadable!]
  8. Lorenzo Giorgiani & Gian Maria Milesi-Ferretti, 1997. "Determinants of Korean Trade Flows and their Geographical Destination," IMF Working Papers 97/54, International Monetary Fund.
    Other versions:
  9. Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-15, March. [Downloadable!] (restricted)
  10. Breusch, Trevor S & Wickens, Michael R, 1987. "Dynamic Specification, the Long Run and the Estimation of Transformed Regression Models," CEPR Discussion Papers 154, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Goldstein, Morris & Khan, Mohsin S., 1985. "Income and price effects in foreign trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 20, pages 1041-1105 Elsevier. [Downloadable!] (restricted)
  12. Muscatelli, V. A. & Stevenson, A. A. & Montagna, C., 1994. "Intra-NIE competition in exports of manufactures," Journal of International Economics, Elsevier, vol. 37(1-2), pages 29-47, August. [Downloadable!] (restricted)
  13. Luci Ellis, 2001. "Measuring the Real Exchange Rate: Pitfalls and Practicalities," RBA Research Discussion Papers rdp2001-04, Reserve Bank of Australia. [Downloadable!]
  14. Kaplinsky, Raphael, 1993. "Export Processing Zones in the Dominican Republic: Transforming manufactures into commodities," World Development, Elsevier, vol. 21(11), pages 1851-1865, November. [Downloadable!] (restricted)
  15. Barry Eichengreen & Yeongseop Rhee & Hui Tong, 2004. "The Impact of China on the Exports of Other Asian Countries," NBER Working Papers 10768, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Hendry, David F, 1988. "The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics," Oxford Economic Papers, Oxford University Press, vol. 40(1), pages 132-49, March. [Downloadable!] (restricted)
  17. Tamim Bayoumi & Peter Isard & Steven A. Symansky & Takatoshi Ito, 1996. "Exchange Rate Movements and Their Impact on Trade and Investment in the APEC Region," IMF Occasional Papers 145, International Monetary Fund.
  18. Faini, Riccardo & Clavijo, Fernando & Senhadji-Semlali, Abdel, 1992. "The fallacy of composition argument : Is it relevant for LDCs' manufactures exports?," European Economic Review, Elsevier, vol. 36(4), pages 865-882, May. [Downloadable!] (restricted)
  19. Duttagupta, Rupa & Spilimbergo, Antonio, 2003. "What Happened to Asian Exports During the Crisis?," CEPR Discussion Papers 4158, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  20. Breusch, T S & Pagan, A R, 1980. "The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics," Review of Economic Studies, Blackwell Publishing, vol. 47(1), pages 239-53, January. [Downloadable!] (restricted)
  21. Jose Antonio Ocampo & Maria Angela Parra, 2004. "The Terms Of Trade For Commodities In The Twentieth Century," International Trade 0402006, EconWPA. [Downloadable!]
  22. Balassa, Bela, 1988. "The adding up problem," Policy Research Working Paper Series 30, The World Bank. [Downloadable!]
  23. Jörg Mayer, 2003. "The Fallacy Of Composition: A Review Of The Literature," UNCTAD Discussion Papers 166, United Nations Conference on Trade and Development. [Downloadable!]
    Other versions:
  24. Baltagi, Badi H. & Boozer, Michael A., 1997. "Econometric Analysis of Panel Data," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October. [Downloadable!]
Full references

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. "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!]
  2. 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!]
  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)
    Other versions:
Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by encouraging others to register as authors.

This page was last updated on 2009-11-18.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.