International constraints to export growth in LDC's
1988
Faini, R. | Clavijo, F. | Senhadji-Semlali, A.
The constraints imposed upon LDC's export growth by the international economy have been the subject of a long-standing controversy. In this paper we present estimates of manufactures export demand functions for 23 LDC's. This allows us, admittedly to a limited extent, to address some of the issues we have just mentioned. We focus first on the constraints that the international environment imposes upon export growth for an international environment imposes upon export growth for an individual LDC. To this purpose the small country hypothesis of an infinitely elastic export demand is tested and the claim that supply factors play a determinant role in affecting export performances in then assessed. We turn next to the constraint on global LDC growth. We take in this respect a fairly indirect route by asking whether exports form LDC's compete mostly with Northern products or are better substitutes with exports from other LDC's. This allows us to assess the heuristic value of Cline's (1982) remark that a generalized outward shift in the LDC's export supply schedule would be associated with an important decline in prices and would undermine the success of a widespread export-led strategy. Finally we offer, for a pooling of 13 LDCs, some preliminary evidence that nontariff barriers in the North already act as a major retarding factor of export growth for LDC's
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