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Developing Country Exports of Manufactures: Moving Up the Ladder to Escape the Fallacy of Composition?

  • Arslan Razmi

    ()

    (Department of Economics, University of Massachusetts - Amherst)

  • Robert A. Blecker

    ()

    (Department of Economics, American University)

This paper tests for a ‘fallacy of composition’ by analysing the demand for exports of the 18 developing countries that are most specialised in manufactures in the markets of the 10 largest industrial countries. Estimated export equations (both time-series and panel data) suggest that most developing countries compete with other developing country exporters rather than with industrialised country producers. A smaller number of countries that export more high-technology products compete with industrialised country producers and also have higher expenditure elasticities for their exports. Thus, the fallacy of composition applies mainly to the larger group of countries exporting mostly low-technology products.

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File URL: http://w.american.edu/cas/economics/repec/amu/workingpapers/2006-06.pdf
File Function: First version, 2006
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Paper provided by American University, Department of Economics in its series Working Papers with number 2006-06.

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Length: 46 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:amu:wpaper:0606
Contact details of provider: Web page: http://www.american.edu/cas/economics/

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