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The Economics of Export-Performance Requirements

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  • Dani Rodrik

Abstract

This paper analyzes the resource-allocation and welfare effects of export-performance requirements imposed on foreign investors. It argues that a satisfactory analysis must consider the presence of tariff distortions and oligopolistic behavior in host-country markets. These create a second-best environment in which an evaluation of the welfare effects of such requirements is no longer straightforward. It is concluded that export requirements can improve home welfare by reducing payments to foreign capital, reducing the output of commodities which are being overproduced, and shifting profits toward domestically owned firms.

Suggested Citation

  • Dani Rodrik, 1987. "The Economics of Export-Performance Requirements," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(3), pages 633-650.
    • Handle: RePEc:oup:qjecon:v:102:y:1987:i:3:p:633-650.
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    File URL: http://hdl.handle.net/10.2307/1884221
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    Cited by:

    1. Hoekman, Bernard & Saggi, Kamal, 1999. "Multilateral disciplines for investment-related policies," Policy Research Working Paper Series 2138, The World Bank.
    2. Fabrice Defever & José‐Daniel Reyes & Alejandro Riaño & Miguel Eduardo Sánchez‐Martín, 2019. "Special Economic Zones and WTO Compliance: Evidence from the Dominican Republic," Economica, London School of Economics and Political Science, vol. 86(343), pages 532-568, July.
    3. Ayçıl Yücer & Jean-Marc Siroën, 2017. "Trade Performance of Export Processing Zones," The World Economy, Wiley Blackwell, vol. 40(5), pages 1012-1038, May.
    4. Chao, Chi-Chur & Yu, Eden S. H., 1998. "Export-share requirements, trade balances and welfare: a two-period analysis," Journal of Development Economics, Elsevier, vol. 56(1), pages 217-228, June.
    5. Ingene, Charles A. & Yu, Eden S. H. & Chao, Chi-Chur, 2004. "The impact of export share requirements under production uncertainty," International Review of Economics & Finance, Elsevier, vol. 13(2), pages 201-215.
    6. Zdenek Drabek & Marc Bacchetta, 2004. "Tracing the Effects of WTO Accession on Policy‐making in Sovereign States: Preliminary Lessons from the Recent Experience of Transition Countries," The World Economy, Wiley Blackwell, vol. 27(7), pages 1083-1125, July.
    7. Dani Rodrik, 1988. "Imperfect Competition, Scale Economies, and Trade Policy in Developing Countries," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 109-144, National Bureau of Economic Research, Inc.
    8. Martin, Will, 2005. "Outgrowing resource dependence theory and some recent developments," Policy Research Working Paper Series 3482, The World Bank.
    9. Defever, F. & Reyes, J-D., 2016. "Does the Elimination of Export Requirements in Special Economic Zones A ect Export Performance? Evidence from the Dominican Republic," Working Papers 16/04, Department of Economics, City University London.
    10. Defever, Fabrice & Riaño, Alejandro, 2017. "Subsidies with export share requirements in China," Journal of Development Economics, Elsevier, vol. 126(C), pages 33-51.
    11. Bijit Bora & Peter J. Lloyd & Mari Pangestu, 2000. "Industrial Policy And The Wto," UNCTAD Blue Series Papers 6, United Nations Conference on Trade and Development.
    12. Yu, Eden S. H. & Chi-Chur, Chao, 1996. "Are wholly foreign-owned enterprises better than joint ventures?," Journal of International Economics, Elsevier, vol. 40(1-2), pages 225-237, February.
    13. Derek Headey, 2007. "What Professor Rodrik Means by Policy Reform: Appraising a Post-Washington Paradigm," CEPA Working Papers Series WP052007, School of Economics, University of Queensland, Australia.
    14. Bacchetta, Marc & Drabek, Zdenek, 2002. "Effects of WTO accession on policy-making in sovereign states: Preliminary lessons from the recent experience of transition countries," WTO Staff Working Papers DERD-2002-02, World Trade Organization (WTO), Economic Research and Statistics Division.
    15. Chao, Chi-Chur & Yu, Eden S. H., 2003. "Export-performance requirements, foreign investment quotas, and welfare in a small dynamic economy," Journal of Development Economics, Elsevier, vol. 72(1), pages 387-400, October.

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