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Australia's export potential: an exploratory analysis

Author

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  • Adil Khan Miankhel
  • Kaliappa Kalirajan
  • Shandre M. Thangavelu

Abstract

A country's inability to export to its potential is a reflection of institutional and infrastructural impediments and rigidities that exist at home as well as in its trading partners. Distinguishing these rigidities as ‘behind the border’ factors and ‘beyond the border’ factors, respectively, this paper examines the impact of ‘behind the border’ factors on Australia's export potential. The hypothesis tested in this paper is that the ‘behind the border’ factors are important in almost all exporting countries and exert negative effects on export potential of the countries. Australia, which is relatively open among the resource-based developed economies, is chosen for testing the hypothesis by estimating a stochastic frontier gravity model using bilateral data from 2006 to 2008 on trade with its key trading partners. The empirical analysis indicates that even in the case of Australia, which is a developed country, ‘behind the border’ factors are important in explaining the reasons for its failure to export to its full potential.

Suggested Citation

  • Adil Khan Miankhel & Kaliappa Kalirajan & Shandre M. Thangavelu, 2014. "Australia's export potential: an exploratory analysis," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 19(2), pages 230-246, April.
    • Handle: RePEc:taf:rjapxx:v:19:y:2014:i:2:p:230-246
    DOI: 10.1080/13547860.2013.820472
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, vol. 20(3), pages 363-368, May.
    3. Nilsson, Lars, 2000. "Trade integration and the EU economic membership criteria," European Journal of Political Economy, Elsevier, vol. 16(4), pages 807-827, November.
    4. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Cited by:

    1. Memduh Alper Demir & Mustafa Bilik & Utku Utkulu, 2017. "The Impact of Competitiveness on Trade Efficiency: The Asian Experience by Using the Stochastic Frontier Gravity Model," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 5(4), pages 1-15.
    2. Sergei S. Sudakov & Alexey A. Zinchenko, 2024. "Export Potential Assessment Methodology: The Case of the Republic of Uzbekistan," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 61-77, February.

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