On exports and economic growth

Abstract

The paper analyses the sources of growth in the period 1964–1973 for a group of semi- industrialized less developed countries. An analytical framework is developed, incorporating the possibility that marginal factor productivities are not equal in the export and non-export sectors of the economy. Econometric analysis utilizing this framework indicates that marginal factor productivities are significantly higher in the export sector. The difference seems to derive, in part, from inter-sectoral beneficial externalities generated by the export sector. The conclusion is therefore that growth can be generated not only by increases in the aggregate levels of labor and capital, but also by the reallocation of existing resources from the less efficient non-export sector to the higher productivity export sector.