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Export Competitiveness - Fuel Price Nexus in Developing Countries: Real or False Concern?

Kangni Kpodar (), Stefania Fabrizio and Kodjovi Eklou

No 2019/025, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates the impact of domestic fuel price increases on export growth in a sample of 77 developing countries over the period 2000-2014. Using a fixed-effect estimator and the local projection approach, we find that an increase in domestic gasoline or diesel price adversely affects real non-fuel export growth, but only in the short run as the impact phases out within two years after the shock. The results also suggest that the negative effect of fuel price increase on exports is mainly noticeable in countries with a high-energy dependency ratio and countries where access to an alternative source of energy, such as electricity, is constrained, thus preventing producers from altering energy consumption mix in response to fuel price changes.

Keywords: Fuel prices; Inflation; Export performance; Energy prices; Real exports; WP,export growth,price shock,gasoline pump price,cross price elasticity,diesel pump price,energy price shock,fuel price hike,fuel price increase,input cost,price change,pump price,stabilization fund (search for similar items in EconPapers)
Pages: 34
Date: 2019-02-04
New Economics Papers: this item is included in nep-ene and nep-int
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Working Paper: Export competitiveness - Fuel Price nexus in Developing Countries: Real or False Concern? (2019) Downloads
Working Paper: Export competitiveness - Fuel Price nexus in Developing Countries: Real or False Concern? (2019) Downloads
Working Paper: Export competitiveness - Fuel Price nexus in Developing Countries: Real or False Concern? (2019) Downloads
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