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Export Performance and Export-Import Linkage Requirements

Mark G. Herander and Christopher Thomas ()

The Quarterly Journal of Economics, 1986, vol. 101, issue 3, 591-607

Abstract: This paper examines the resource allocation effects of two policies widely employed by developing countries to improve their trade balances. Compared to free-trade, both export performance and export-import linkage policies may actually worsen the balance of trade unless they are coupled with an import barrier on final goods. Even with such barriers, an export-import linkage policy still may not cause the trade balance to improve. The effects of both policies on a number of domestic variables are discussed. Profit and output of domestic exporters can increase under trade performance policies.

Date: 1986
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Handle: RePEc:oup:qjecon:v:101:y:1986:i:3:p:591-607.