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Modelling NIE exports: Aggregation, quantitative restrictions and choice of econometric methodology

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  • Prema-Chandra Athukorala
  • James Riedel

Abstract

The current debate regarding the robustness of estimates of export demand and supply elasticities for NIEs is examined by modelling manufactured exports from Korea. The results suggest that normalisation of the export demand function for price rather than quantity is an important issue in estimating export demand functions of small countries, and that estimates of export demand elasticities at high levels of aggregation are subject to potentially powerful biases, when the aggregate consists of categories which are subject to quantitative restrictions. If proper modelling procedures are followed, it is likely that the small country assumption will find far more empirical support than it has hitherto.

Suggested Citation

  • Prema-Chandra Athukorala & James Riedel, 1996. "Modelling NIE exports: Aggregation, quantitative restrictions and choice of econometric methodology," Journal of Development Studies, Taylor & Francis Journals, vol. 33(1), pages 81-98.
    • Handle: RePEc:taf:jdevst:v:33:y:1996:i:1:p:81-98
    DOI: 10.1080/00220389608422454
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    References listed on IDEAS

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    1. Andrew C. Harvey, 1990. "The Econometric Analysis of Time Series, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026208189x, December.
    2. Vines,David & Currie,David, 2010. "North–South Linkages and International Macroeconomic Policy," Cambridge Books, Cambridge University Press, number 9780521142649.
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    Cited by:

    1. A. U. Santos-Paulino, 2002. "Trade Liberalisation and Export Performance in Selected Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 39(1), pages 140-164.
    2. Tilak Abeysinghe & Keen Meng Choy, 2005. "Modelling Small Economy Exports : The Case of Singapore," Trade Working Papers 21980, East Asian Bureau of Economic Research.
    3. Al-Habashneh Fedel Mayuf, 2022. "The Narrow and Expanded Money Supply and Its Impact on Interest Rate and Product of the Private Sector in Jordan during the Period (1990–2019)," Foundations of Management, Sciendo, vol. 14(1), pages 143-154, January.
    4. Ranjini L. Thaver & Christina Bova, 2014. "An Estimation of Ecuador's Export Demand Function with the US," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 8(1), pages 89-102.
    5. Tilak Abeysinghe & Keen Meng Choy, 2005. "Modelling Small Economy Exports : The Case of Singapore," Trade Working Papers 21980, East Asian Bureau of Economic Research.
    6. Sinha Roy, Saikat, 2007. "Demand and Supply Factors in the Determination of India's Disaggregated Manufactured Exports: A Simultaneous Error-Correction Aprroach," MPRA Paper 68589, University Library of Munich, Germany.
    7. Andreas Benedictow, 2000. "An Econometric Analysis of Exports of Metals: Product Differentiation and Limited Output Capacity," Discussion Papers 287, Statistics Norway, Research Department.
    8. Charles Becker & Terry-Ann Craigie, 2007. "W. Arthur Lewis in Retrospect," The Review of Black Political Economy, Springer;National Economic Association, vol. 34(3), pages 187-216, December.
    9. Athukorala, Premachandra & Riedel, James, 1994. "Demand and Supply Factors in the Determination of NIE Exports: A Simultaneous Error-Correction Model for Hong Kong: A Comment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1411-1414, November.
    10. Rudy Rahmaddi & Masaru Ichihashi, 2012. "The impact of foreign direct investment on host country exports: Sector based evidence from Indonesian manufacturing," IDEC DP2 Series 2-10, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
    11. Jonathan Perraton, 2003. "Balance of Payments Constrained Growth and Developing Countries: An examination of Thirlwall's hypothesis," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 1-22.

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