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


  • Hudson, Darren
  • Ethridge, Don


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 of a structural econometric model of these sectors of Pakistan's economy. Results indicated that the export tax had a negative impact on the growth rate in the cotton sector, while having little or no impact on the yarn sector. Thus, the export tax did not achieve its objective of increasing the growth rate of value-added (yarn) production above what would have occurred naturally. © 1999 Elsevier Science B.V. All rights reserved.
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  • Hudson, Darren & Ethridge, Don, 1999. "Export taxes and sectoral economic growth: evidence from cotton and yarn markets in Pakistan," Agricultural Economics, Blackwell, vol. 20(3), pages 263-276, May.
  • Handle: RePEc:eee:agecon:v:20:y:1999:i:3:p:263-276

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    References listed on IDEAS

    1. Chen, Tain-Jy & Tang, De-piao, 1990. "Export Performance and Productivity Growth: The Case of Taiwan," Economic Development and Cultural Change, University of Chicago Press, vol. 38(3), pages 575-585, April.
    2. Adelman, Irma, 1984. "Beyond export-led growth," World Development, Elsevier, vol. 12(9), pages 937-949, September.
    3. Evans, Sam & Bell, Thomas M., 1978. "How Cotton Acreage, Yield, And Production Respond To Price Changes," Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, issue 2.
    4. King, Robert G & Rebelo, Sergio, 1990. "Public Policy and Economic Growth: Developing Neoclassical Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 126-150, October.
    5. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    6. Adelman, Irma, 1984. "Beyond export-led growth," CUDARE Working Paper Series 309, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
    7. Clark, Don P. & Kaserman, David L. & Anantanasuwong, Darrarat, 1993. "A diffusion model of industrial sector growth in developing countries," World Development, Elsevier, vol. 21(3), pages 421-428, March.
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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. 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 for the Study of Labor (IZA).
    4. Hudson, Darren, 2000. "The World Trade Organization And Southern Agriculture: The Cotton Perspective," Professional Papers 15804, Mississippi State University, Department of Agricultural Economics.
    5. 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.

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