 The impact of labor costs on manufactured exports in developing countries: an econometric analysisNo 204, Policy Research Working Paper Series from The World Bank Abstract: This paper estimates export supply elasticities in 20 countries using an empirical model in which manufactured exports are a function of the price of exports, the price of imported inputs, and labor costs relative to the price of home goods. The export supply equation is completed with a variable identifying manufacturing capacity and a variable associated with the role of internal absorption. After testing for simultaneity, the paper concludes that half of the countries must be treated as large countries - thus estimating the export supply function through two-stage least squares. Also explored are other sources of endogeneity of right-hand side variables - the price of imported inputs, labor costs, and manufacturing capacity. It is found that in many cases the estimates change significantly as a result of this procedure. In general, the conclusions underscore the impact on exports of domestic economic policies - for example, promoting investment and productive capacity and keeping factor markets free of significant distortions. Keywords: Economic Theory&Research; Environmental Economics&Policies; Access to Markets; Markets and Market Access; Banks&Banking Reform (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:204 Access Statistics for this paper More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC. |
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