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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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File URL: http://www.sciencedirect.com/science/article/B6T3V-3WP2H8Y-7/2/82aefb9f79acc45a60724208fe773026
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Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 20 (1999)
Issue (Month): 3 (May)
Pages: 263-276

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Handle: RePEc:eee:agecon:v:20:y:1999:i:3:p:263-276
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  1. Robert G. King & Sergio Rebelo, 1990. "Public Policy and Economic Growth: Developing Neoclassical Implications," NBER Working Papers 3338, National Bureau of Economic Research, Inc.
  2. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
  3. 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.
  4. Adelman, Irma, 1984. "Beyond export-led growth," World Development, Elsevier, vol. 12(9), pages 937-949, September.
  5. 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.
  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. 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 575-85, April.
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