THE CONTRIBUTION OF EXPORTS TO GROWTH IN CONTEMPORARY INTERNATIONAL TRADE

CLIVE OTHNIEL DANIEL, Fordham University

Abstract

In this dissertation an attempt was made to determine whether export-orientation contributed to growth in underdeveloped countries in the contemporary world.^ In the literature economists vary widely in their views on the impact of international trade on the economies of underdeveloped countries. Some economists believe that underdeveloped countries receive both static direct benefits and dynamic indirect benefits from trading with developed nations. Others believe that structural differences in the economies of the two types of country bias the gains from international trade in favor of the developed nations. Yet others believe that participation in international trade actually contributed to underdevelopment in the poor nations.^ In this dissertation it was acknowledged that the large gains from trade predicted by classical economists did not accrue to underdeveloped nations during the colonial era. It was pointed out that classical theory carried an implicit assumption of sovereign nations engaging in international trade only if it was in the interest of each nation to do so. By definition, such universal sovereignty did not exist during the colonial period. It was therefore possible for international trade to be harmful to colonial economies. It was also acknowledged in the dissertation that the fact of constitutional independence did not necessarily lead to a change in the nature of the trading relationships which existed between nations. This dissertation was an attempt to determine whether today's constitutionally independent underdeveloped countries were succeeding in capturing the gains from trade which were predicted by classical trade theorists.^ A growth model was developed in which the percentage change in per capita income was the dependent variable and export-orientation was one of the independent variables. Export-orientation was defined as the value of exports as a percent of Gross Domestic Product. The study included 84 nations and covered the period from 1960-1976. The underdeveloped nations were divided into small and large countries according to population size. For comparison purposes a sample of developed nations was also studied. The 17 years covered by the study were divided into three consecutive periods. There were 1960-1965, 1966-1970 and 1971-1976.^ One conclusion reached by the study was export-orientation contributed significantly to growth in underdeveloped countries only when either their commodity or income terms of trade was improving. This was demonstrated in the small underdeveloped countries during the second sub-period when there was an improvement in their commodity terms of trade and during the third sub-period of the large underdeveloped countries when there was a significant improvement in the income terms of trade of those nations. Export-orientation was not found to be a significant factor in the economic performance of the developed nations. This finding was attributed to the greater importance of their domestic markets.^ Constraints on the ability of underdeveloped countries to improve either measure of the terms of trade were discussed. ^

Subject Area

Economics

Recommended Citation

DANIEL, CLIVE OTHNIEL, "THE CONTRIBUTION OF EXPORTS TO GROWTH IN CONTEMPORARY INTERNATIONAL TRADE" (1981). ETD Collection for Fordham University. AAI8123541.
https://fordham.bepress.com/dissertations/AAI8123541

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