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Terms of Trade for Manufactured Exports from Developing Countries

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  • Athukorala , Prema-Chandra

    (Arndt-Corden Division of Economics Research School of Pacific and Asian Studies Australian National University)

Abstract

This paper examines the empirical validity of the recent hypothesis by Singer that, owing to certain country specific disadvantages, the net barter terms of trade (NBTT) for exports of manufactures from developing countries (DCs) tend to experience secular deterioration favouring the importing industrialised countries (ICs). We estimate trend rates of NBTT for manufactured exports from all DCs as well as from India, Korea and Taiwan, by applying an econometric procedure designed to avoid the problem of spurious trend estimation to a carefully assembled data set. Our results reject the deteriorating trend hypothesis and suggest that the shift away from primary commodities and towards manufactured goods in export composition allows DCs to escape unequal exchange relations in their trade with ICs.

Suggested Citation

  • Athukorala , Prema-Chandra, 1995. "Terms of Trade for Manufactured Exports from Developing Countries," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 48(2), pages 179-195.
    • Handle: RePEc:ris:ecoint:0399
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