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Export taxes and sectoral economic growth: evidence from cotton and yarn markets in Pakistan

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  • Darren Hudson
  • Don Ethridge

Abstract

Pakistan used an export tax on raw cotton from 1988‐1995 in order to suppress the internal price of cotton to benefit the domestic yarn industry. An analysis was conducted to estimate the impact of this policy on both the cotton and yarn sectors. These effects were simulated using the results ol a structural econometric model of these sectors of Pakistan's economy Results indicated that the export tax had a negative impact on the growth rale in the cotton sector, while having little or no impact on the yarn sector. Thus, the export lax did not achieve its objective of increasing the growth rate of value‐added (yarn) production above what would have occurred naturally.

Suggested Citation

  • Darren Hudson & Don Ethridge, 1999. "Export taxes and sectoral economic growth: evidence from cotton and yarn markets in Pakistan," Agricultural Economics, International Association of Agricultural Economists, vol. 20(3), pages 263-276, May.
    • Handle: RePEc:bla:agecon:v:20:y:1999:i:3:p:263-276
    DOI: 10.1111/j.1574-0862.1999.tb00572.x
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    Cited by:

    1. Piermartini, Roberta, 2004. "The role of export taxes in the field of primary commodities," WTO Discussion Papers 4, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Panos Hatzipanayotou & Sajal Lahiri & Michael Michael, 2011. "Trade and domestic tax reforms in the presence of a public good and different neutrality conditions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(3), pages 273-290, June.
    3. Pavel ŽAMBERSKÝ & Radek ČAJKA, 2015. "Taxation of exports - theory and practice," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(4), pages 158-165.
    4. Danzer, Alexander M. & Grundke, Robert, 2016. "Coerced Labor in the Cotton Sector: How Global Commodity Prices (Don't) Transmit to the Poor," IZA Discussion Papers 9971, Institute of Labor Economics (IZA).
    5. Junaid Ahmed, 2025. "Pakistan`s Dismal Export Performance: A Survey of Empirical Literature," PIDE-Working Papers 2025:10, Pakistan Institute of Development Economics.
    6. Hudson, Darren, 2000. "The World Trade Organization And Southern Agriculture: The Cotton Perspective," Professional Papers 15804, Mississippi State University, Department of Agricultural Economics.
    7. Olga Solleder, 2013. "Panel Export Taxes (PET) Dataset: New Data on Export Tax Rates," IHEID Working Papers 07-2013, Economics Section, The Graduate Institute of International Studies.
    8. Ying Lin & Henry W. Kinnucan, 2020. "The optimal export tax for a primary commodity in a vertical market," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 909-922, November.

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