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Gains from Export Growth: Do Linkages Matter?

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  • Prema-Chandra Athukorala

  • Bambang H Santosa

Abstract

Policy makers in developing countries often place emphasis on inter-sectoral input linkages ( linkages for short) in determining sectoral priorities in export development policy, particularly in designing export promotion schemes and in screening and monitoring export-oriented foreign direct investment. Development analysts too place emphasis on linkages as an operational norm in assessing the developmental impact of emerging export industries. The purpose of this paper is to argue that the use of this closed-economy planning tool as a performance criterion in the context of exportoriented growth strategy is fundamentally flawed. We illustrate our argument using Indonesia as a case study. The methodology adopted involves the examination, using the Leontief inter-industry accounting framework as the main analytical tool, of the relationship between sectoral input linkages, and employment impact and contribution to net foreign exchange earnings of manufactured exports in Indonesian manufacturing during 1985-95.

Suggested Citation

  • Prema-Chandra Athukorala & Bambang H Santosa, 1996. "Gains from Export Growth: Do Linkages Matter?," Departmental Working Papers 1996-13, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:1996-13
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    References listed on IDEAS

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    1. Hill, Hal, 1996. "Indonesia's Industrial Policy and Performance: "Orthodoxy" Vindicated," Economic Development and Cultural Change, University of Chicago Press, vol. 45(1), pages 147-174, October.
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    7. Premachandra Athukorala, 1995. "Foreign Direct Investment and Manufacturing for Export in a New Exporting Country: The Case of Sri Lanka," The World Economy, Wiley Blackwell, vol. 18(4), pages 543-564, July.
    8. James Riedel, 1976. "A Balanced-Growth Version of the Linkage Hypothesis: A Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(2), pages 319-322.
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