On the new export sector in developing countries

Authors: Oda, Masao¹; Stapp, Robert²; Mihara, Ichiro²

Source: International Economic Journal, Volume 19, Number 4, Number 4/December 2005 , pp. 579-587(9)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

Many developing countries are establishing a new export sector by accepting foreign direct investment. Developing a three-sectors three-factors general equilibrium model with tariff, this paper considers the condition under which the acceptance of direct investment is desirable for the developing countries. We show that the factor intensity rankings among the sectors play a key role on the welfare effects and that direct investment increases the output of both the new export and the traditional export sector and promotes the export-led growth in developing countries.

Keywords: New export sector; direct investment; factor intensity

Document Type: Research article

DOI: http://dx.doi.org/10.1080/10168730500199608

Affiliations: 1: Kansai University, Japan 2: University of Arkansas, USA

Publication date: 2005-12-01