IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v15y2022i1p36-d724357.html
   My bibliography  Save this article

Stimulating Non-Energy Exports in Trinidad and Tobago: Evidence from a Small Petroleum-Exporting Economy Experiencing the Dutch Disease

Author

Listed:
  • Roger Hosein

    (Department of Economics, The University of the West Indies, St. Augustine, Trinidad and Tobago)

  • Leera Boodram

    (Department of Economics, The University of the West Indies, St. Augustine, Trinidad and Tobago)

  • George Saridakis

    (Business School, The University of Kent, Canterbury CT2 7NZ, UK)

Abstract

The motivation for this study hinges around the fact that Trinidad and Tobago (T&T) is suffering from the Dutch disease which inadvertently hinders the growth of non-energy exports. This paper examines measures that can be adopted for a small petroleum-exporting economy to dampen the effect of Dutch disease by promoting non-energy trade. This paper is novel and contributes to the literature in using panel data for the T&T case, as it investigates the effect of a devaluation of the TT dollar in order to stimulate non-energy exports (a combination of agriculture and manufacturing trade). Note that previous studies would have examined the Marshall–Lerner condition on the aggregate trade balance which is heavily influenced by energy revenues. The panel autoregressive distributed lag (ARDL) method is used for ten of T&T’s main trading partners for the period 1991 to 2019 to establish findings. The results show that the Marshall–Lerner condition does not hold for aggregate trade in the long run, as expected. However, when non-energy trade is isolated, it is found that a devaluation of the TT dollar does have a positive impact on non-energy trade and the Marshall–Lerner condition holds. Other measures are also recommended to stimulate non-energy exports in the long run.

Suggested Citation

  • Roger Hosein & Leera Boodram & George Saridakis, 2022. "Stimulating Non-Energy Exports in Trinidad and Tobago: Evidence from a Small Petroleum-Exporting Economy Experiencing the Dutch Disease," JRFM, MDPI, vol. 15(1), pages 1-21, January.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:1:p:36-:d:724357
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/15/1/36/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/15/1/36/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mohsen Bahmani-Oskooee & Janardhanan Alse, 1994. "Short-Run versus Long-Run Effects of Devaluation: Error-Correction Modeling and Cointegration," Eastern Economic Journal, Eastern Economic Association, vol. 20(4), pages 453-464, Fall.
    2. International Monetary Fund, 2018. "Belgium: 2018 Article IV Consultation - Press Release; Staff Report," IMF Staff Country Reports 2018/071, International Monetary Fund.
    3. International Monetary Fund, 2018. "Trinidad and Tobago: 2018 Article IV Consultation-Press Release and Staff Report," IMF Staff Country Reports 2018/285, International Monetary Fund.
    4. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    5. Lal, Anil K. & Lowinger, Thomas C., 2002. "The J-Curve: Evidence from East Asia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 397-415.
    6. World Bank, 2020. "Doing Business 2020," World Bank Publications - Books, The World Bank Group, number 32436, December.
    7. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Trofimov, Ivan D., 2020. "Is There a J-Curve Effect in the Services Trade in Canada? A Panel Data Analysis," MPRA Paper 106704, University Library of Munich, Germany.
    2. repec:zbw:rwirep:0557 is not listed on IDEAS
    3. Valérie Mignon & Christophe Hurlin, 2007. "Une synthèse des tests de cointégration sur données de panel," Économie et Prévision, Programme National Persée, vol. 180(4), pages 241-265.
    4. Katsoulacos Yannis & Metsiou Eleni & Tsionas Efthymios & Konstantakopoulou Ioanna, 2014. "Quantitative Price Tests in Antitrust Market Definition with an Application to the Savory Snacks Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 1-33, January.
    5. Win Chou & Dominica Lee, 2005. "Panel Cointegration Analysis of Audit Pricing Model," Review of Quantitative Finance and Accounting, Springer, vol. 24(4), pages 423-439, June.
    6. Olimpia Neagu, 2019. "The Link between Economic Complexity and Carbon Emissions in the European Union Countries: A Model Based on the Environmental Kuznets Curve (EKC) Approach," Sustainability, MDPI, vol. 11(17), pages 1-27, August.
    7. Campo, Jacobo & Mendoza, Henry, 2018. "Gasto público y crecimiento económico: un análisis regional para Colombia, 1984-2012," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 88, pages 77-108, January.
    8. Mohsen Bahmani-Oskooee & Hanafiah Harvey, 2018. "Is There J-Curve Effect In The Commodity Trade Of Singapore With Malaysia? An Empirical Study," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(03), pages 567-591, June.
    9. John Geweke & Joel Horowitz & M. Hashem Pesaran, 2006. "Econometrics: A Bird’s Eye View," CESifo Working Paper Series 1870, CESifo.
    10. MAÏ ASSAN CHEDI, Maman, 2022. "Does Defence Expenditure Affect Education and Health expenditures in Saharan Africa?," African Journal of Economic Review, African Journal of Economic Review, vol. 10(4), September.
    11. Mohsen Bahmani‐Oskooee & Hanafiah Harvey, 2012. "How responsive are Indonesia's bilateral inpayments and outpayments to real depreciation of Rupiah?," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 29(2), pages 133-143, June.
    12. Mohsen Bahmani-Oskooee and Hanafiah Harvey, 2018. "The U.S. Trade Balance with Partners from Developing World: An Asymmetry Analysis of the J-Curve Effect," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(2), pages 29-44, June.
    13. Boswijk, H. Peter & Franses, Philip Hans & van Dijk, Dick, 2010. "Cointegration in a historical perspective," Journal of Econometrics, Elsevier, vol. 158(1), pages 156-159, September.
    14. Bella, Giovanni & Massidda, Carla & Mattana, Paolo, 2014. "The relationship among CO2 emissions, electricity power consumption and GDP in OECD countries," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 970-985.
    15. Damette, Olivier & Seghir, Majda, 2013. "Energy as a driver of growth in oil exporting countries?," Energy Economics, Elsevier, vol. 37(C), pages 193-199.
    16. Simplice Asongu, 2014. "REER Imbalances and Macroeconomic Adjustments in the Proposed West African Monetary Union," South African Journal of Economics, Economic Society of South Africa, vol. 82(2), pages 276-289, June.
    17. Yongming Shi & Khalid Ahmed & Sudharshan Reddy Paramati, 2021. "Determinants of stock market development and price volatility in ASEAN plus three countries: The role of institutional quality," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 560-572, January.
    18. Francesco Aiello & Graziella Bonanno & Alessia Via, 2015. "Again on trade elasticities: evidence from a selected sample of countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 259-287, December.
    19. Hsing Yu, 2008. "A Study of the J-Curve for Seven Selected Latin American Countries," Global Economy Journal, De Gruyter, vol. 8(4), pages 1-14, December.
    20. Nicos Christodoulakis & Christos Axioglou, 2017. "Underinvestment and Unemployment: The Double Hazard in the Euro Area," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot GmbH, Berlin, vol. 63(1), pages 49-80.
    21. VANNESTE, Jacques & ZHANG, Ying, 2012. "The impact of government expenditure on prepayment for health services: Evidence from cointegration analysis in heterogeneous panel data," Working Papers 2012029, University of Antwerp, Faculty of Business and Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:15:y:2022:i:1:p:36-:d:724357. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.