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

Arslan Razmi () and Robert A. Blecker ()
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Arslan Razmi: Department of Economics, University of Massachusetts

No 2006-06, Working Papers from American University, Department of Economics

Abstract: 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.

Keywords: Developing country exports of manufactures; intra-developing country competition; fallacy of composition; real exchange rates; technological ladder; adding-up constraint. (search for similar items in EconPapers)
JEL-codes: O19 O14 F14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-reg
Date: 2006-04
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http://www.american.edu/academic.depts/cas/econ/workingpapers/2006-06.pdf First version, 2006 (application/pdf)

Related works:
Working Paper: Developing Country Exports of Manufactures: Moving Up the Ladder to Escape the Fallacy of Composition? (2006)
Journal Article: Developing Country Exports of Manufactures: Moving Up the Ladder to Escape the Fallacy of Composition? (2008)
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