Effects of Primary Exports on Industrial Exports and GDP: Empirical Evidence

Abstract

This paper analyzes the effects of the growth of nonfuel primary exports on the growth of industrial exports and GDP in 74 economies between 1965 and 1992. There is clear evidence of positive effects, both in the short term and in the long term, of the growth of primary exports on the growth of industrial exports and GDP in more than two-thirds of the economies. Therefore, governments in developing countries should not discriminate against the export of primary products, as some earlier studies suggest. Instead, they should adhere to policies that aim at export promotion.