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Determinants of Labor-intensive exports by the Developing Countries : A Cross Country Analysis

Author

Listed:
  • Mottaleb Khondoker

    (International Rice Research Institute)

  • Kaliappa Kalirajan

    (Manila and Crawford School of Public Policy)

Abstract

While it is widely recognized that industrial development is imperative in developing countries to reduce poverty and to attain sustainable economic growth, there is no consensus on how to develop industries and where to start. Generally, the literature argues that developing countries should concentrate on promoting labour intensive industries and exports first due to their low capital stock and relatively abundant labor force. Though many developing countries are attempting to follow this path, the interesting observation is that not all developing countries are reaping the benefits of promoting labor intensive industries in terms of employment generation and sustaining economic growth. This raises an important question as to how it is possible for some developing countries to enjoy more benefits from labor intensive industries, while others are not able to do so. Using cross-country panel data in explaining heterogeneous performance in exporting labor intensive products by the developing countries, an attempt has been made in this paper to identify the important factors over and above the conventional factors such as low labor wages that contribute to the sustained growth of labor intensive exports from developing countries. The empirical findings of this paper emphasizes that even to initiate and sustain the growth of the low value added industries, such as garments, the developing countries should develop basic infrastructure and maintain a friendly business environment.

Suggested Citation

  • Mottaleb Khondoker & Kaliappa Kalirajan, 2012. "Determinants of Labor-intensive exports by the Developing Countries : A Cross Country Analysis," EABER Working Papers 23304, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:wpaper:23304
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    References listed on IDEAS

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    1. Moschos, Demetrios, 1989. "Export expansion, growth and the level of economic development: An empirical analysis," Journal of Development Economics, Elsevier, vol. 30(1), pages 93-102, January.
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    More about this item

    Keywords

    Developing country; Garment and textile export; Infrastructure; Business Environment; Asia; Sub-Saharan Africa.;

    JEL classification:

    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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