Determinants of Exports in a Small and Vulnerable Economy: Fiji Islands—A Disaggregated Analysis

Ronal Chand (), Rup Singh (), Sumeet Lal (), Nilesh Chand () and Devendra Kumar Jain ()
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Ronal Chand: The University of the South Pacific
Rup Singh: The University of the South Pacific
Sumeet Lal: The University of the South Pacific
Nilesh Chand: The University of the South Pacific
Devendra Kumar Jain: The University of the South Pacific

The European Journal of Development Research, 2022, vol. 34, issue 6, No 14, 2948-2969

Abstract: Abstract The previous studies of exports performance in Fiji were carried out at the aggregate level. We conduct a disaggregated analysis of exports of three major products, namely, sugar, tourism, and gold. This analysis is useful for developing sector-based export promotion policies. The long run as well as dynamic export demand functions are estimated at the aggregate and disaggregate levels. The results identify a number of factors such as trading partner income, relative prices, productivity shocks, natural disasters, political disturbances, and the exchange rate that affect the export demand for sugar, tourism, and gold, though not in the same way. For instance, tourism and sugar enjoy the highest income elasticity. Sugar export is adversely affected by natural calamities and political upheavals. The political upheavals also affect tourism adversely in Fiji. The exchange rate affects the export of sugar more than others. The idea that devaluation will promote exports in Fiji needs careful investigation because results show that this will happen with a high cost, i.e. 5% nominal devaluation will be required to increase real exports by 1%.

Keywords: Determinants of exports; Export promotion policies; Elasticities of exports; Small and vulnerable economies; Fiji (search for similar items in EconPapers)
JEL-codes: A12 B13 B22 B40 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1057/s41287-022-00506-4

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