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Full-Text Articles in Social and Behavioral Sciences
Developing Country Exports Of Manufactures: Moving Up The Ladder To Escape The Fallacy Of Composition?, Arslan Razmi, Robert A. Blecker
Developing Country Exports Of Manufactures: Moving Up The Ladder To Escape The Fallacy Of Composition?, Arslan Razmi, Robert A. Blecker
Economics Department Working Paper Series
This paper tests for a ‘fallacy of composition’ by analysing the demand for exports of the 18 developing countries that are most specialised in manufactures in the markets of the 10 largest industrial countries. Estimated export equations (both time-series and panel data) suggest that most developing countries compete with other developing country exporters rather than with industrialised country producers. A smaller number of countries that export more high-technology products compete with industrialised country producers and also have higher expenditure elasticities for their exports. Thus, the fallacy of composition applies mainly to the larger group of countries exporting mostly low-technology products.
Price Competition And The Fallacy Of Composition In Developing Country Exports Of Manufactures: Estimates Of Short-Run Growth Effects, Robert A. Blecker, Arslan Razmi
Price Competition And The Fallacy Of Composition In Developing Country Exports Of Manufactures: Estimates Of Short-Run Growth Effects, Robert A. Blecker, Arslan Razmi
Economics Department Working Paper Series
This paper studies whether intra-developing country price competition has significant effects on the short-run growth rates of developing countries that are specialized in manufactured exports. Regression estimates using the generalized method of moments (GMM) applied to annual panel data for 17 developing countries in 1983-2004 show that these countries exhibit a “fallacy of composition,” in the sense that a real depreciation relative to competing developing country exporters increases the home country’s growth rate in the short run. The results also suggest that real depreciations for these developing countries relative to the industrialized countries are contractionary.