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The Implications of an Export Tax on Sectoral Growth: A Case in Pakistan

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  • Hudson, Darren
  • Ethridge, Don E.

Abstract

The implications of and export tax on sectoral economic growth in the cotton and yarn sectors in Pakistan are examined. Pakistan utilized an export tax on raw cotton fiber from 1988-1995 in order to lower input cost to domestic yarn spinners. The growth effects are simulated based on the results of a structural econometric model. Simulation results show that the export tax had a significant adverse impact on growth in the raw fiber sector. The lower input cost as a result of the tax, however, did not appear to stimulate growth in the yarn sector over what would have occurred without the policy.

Suggested Citation

  • Hudson, Darren & Ethridge, Don E., 1998. "The Implications of an Export Tax on Sectoral Growth: A Case in Pakistan," Cotton Economics Research Institute CER Series 53164, Texas Tech University, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:ttucer:53164
    DOI: 10.22004/ag.econ.53164
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    File URL: https://ageconsearch.umn.edu/record/53164/files/ImlicationsExportTaxPakistan.pdf
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    Cited by:

    1. Joelle Latina & Roberta Piermartini & Michele Ruta, 2011. "Natural resources and non-cooperative trade policy," International Economics and Economic Policy, Springer, vol. 8(2), pages 177-196, June.

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