Productivity Differential and the Relationship between Exports and GDP in Fiji: An Empirical Assessment Using the Two Sector Model

Abstract

This study uses a two-sector model to determine the productivity differential between the export and non-export sectors of Fiji, and the contribution of exports and investment to gross domestic product over the period 1962-2000. Amongst our key results, we find that the productivity differential between the export and non-export sectors is small and statistically insignificant; investment to GDP ratio and weighted exports positively contribute to economic growth in Fiji; and in the abnormal years (years of coups in Fiji) marginal productivity in capital in the non-export sector is lower than in normal years.