Export Promotion Policies and the Crowding-out Effect in Developing Countries *

Gairuzazmi Ghani ()

Asian Economic Journal, 2006, vol. 20, issue 3, pages 319-331

Abstract: Critics of export promotion policies have pointed out a fallacy of composition, where what is viable for a small country acting in isolation might not be viable when pursued by a group of countries simultaneously. This paper investigates the crowding-out effect of the fallacy of composition; that is, whether developing countries that specialize in exports of manufactured products compete and crowd out one another's exports. The results of fixed-effects panel estimation suggest that developing countries are not crowding out one another's exports. Instead, they are crowding out Western European countries' exports of manufactured products. Copyright 2006 East Asian Economic Association and Blackwell Publishing Ltd..

Date: 2006

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