Can Developing Countries Benefit from Strategic Export Promotion?

32 Pages Posted: 8 Dec 2000

See all articles by Xiangkang Yin

Xiangkang Yin

Deakin University; Financial Research Network (FIRN)

Xiangshuo Yin

Fudan University

Abstract

Casual observation shows that many developing countries adopt certain strategic trade measures such as export subsidies and domestic currency devaluation to promote their exports. This paper analyzes two effects of these measures, the externality associated with the import of capital goods and the reduction of distortion caused by foreign exchange constraint. These effects might be the economic rationale for developing country governments to promote export. It is found that promotion measures can definitely raise employment and productivity, but whether these measures can stimulate the production supplying to the domestic market and improve domestic welfare depends on the sufficient and necessary condition given by the paper.

Keywords: Export promotion, Export subsidy, Devaluation

JEL Classification: F13, F42, O19

Suggested Citation

Yin, Xiangkang and Yin, Xiangshuo, Can Developing Countries Benefit from Strategic Export Promotion?. Available at SSRN: https://ssrn.com/abstract=249078 or http://dx.doi.org/10.2139/ssrn.249078

Xiangkang Yin (Contact Author)

Deakin University ( email )

Melbourne, Victoria
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Xiangshuo Yin

Fudan University

Beijing West District Baiyun Load 10th
Shanghai, 100045
China

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