Does Export Promotion Significantly Improve Growth Prospects for Less Developed Countries
Alternate theoretical approaches emphasize the role of social savings, institutions etc in explaining economic growth than the export promotion policies. Empirical studies, however, give mixed results (Balasa, 1978, 1985. Edward, 1998. Ullah et al, 2009. Elbeydi et al, 2010 etc). The results are dependent on country-specific factors, the methodology adopted for the study etc. Given this background, a detailed empirical study on the contribution of export promotion in enhancing economic growth deserves great importance and has important policy implications.Studies have shown that the stagnation of exports took place in Africa for the past three decades. Moreover, the reports show the composition of exports in Africa remaining unchanged with the share of Africa in the world trade remaining very little (Commission for Africa, 2005). According to the Commission for Africa (2005), given the high poverty, malnutrition etc in Africa without increasing the export performance of the African nations, it will be very difficult to obtain the goals of poverty reduction and enhanced export economic growth. UNCTAD (2008) shows the export performance in Africa far below the performance of many other developing nations. At the same time, in terms of the volume of exports, impressive performance can be seen for many African nations following the reforms as shown by some studies (Morrissey and Mold, 2007).In this context, a detailed econometric study on how the export promotion policies have contributed to enhancing economic growth in Africa has important policy implications. Hence, this study focuses on the econometric cross-section analysis of the contribution of export performance of African nations in enhancing economic growth along with other factors that have significantly affected economic growth for the period 1980 to 2009.Given this background, the main objective of this study is to examine the role of export promotion policies in enhancing economic growth in Africa along withother possible policies and factors mentioned in the literature affecting growth.