Productivity and externalities: models of export-led growth

Jaime de Melo and Sherman Robinson

Chapter 3 in Modeling Developing Countries' Policies in General Equilibrium, 2015, pp 43-70 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In developing countries, successful export-led growth (ELG) industrialization has been associated with rapid structural change and productivity growth. There are major difficulties in explaining this performance using a standard neoclassical growth model. To develop a more satisfactory framework, we start from empirical and theoretical work with models incorporating externalities. We develop a simple analytical model with an export externality that captures the large increase in both total factor productivity and trade share associated with ELG. A second model is developed to decompose growth into various components: (i) factor accumulation, (ii) a factor reallocation effect from moving factors from low to high productivity sectors, (iii) an export externality effect arising from exporting light and heavy manufactures and (iv) an import externality effect arising from importing capital goods (heavy manufactures). The second model is implemented with data for an archetype semi-industrial country. In addition to accounting for the higher total factor productivity growth observed in countries pursuing ELG strategies, the model captures the patterns of structural change experienced by such countries better than simpler neoclassical models without disequilibrium features or externalities.

Keywords: Applied General Equilibrium Models; Trade Policy; Computable General Equilibrium; Archetypes (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789814494816_0003 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789814494816_0003 (text/html)
Ebook Access is available upon purchase.

Related works:
Working Paper: Productivity and externalities: models of export led growth (1990)
Working Paper: Productivity and Externalities: Models of Export-LED Growth (1989)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789814494816_0003

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().