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The Impact of Trade Liberalisation on Enterprises in Small Backward Economies: The Case of Chad and Gabon

Author

Listed:
  • Giorgio Barba Navaretti

    (University of Milano and Centro Studi Luca d’Agliano)

  • Ricardo Faini

    (University of Milano and Centro Studi Luca d’Agliano)

  • Bernard Gauthier

    (IEA, HEC Montréal)

Abstract

This paper examines the impact of the devaluation of the CFA franc in 1994 and of trade and fiscal reforms on enterprise development in Chad and Gabon. These reforms provide a natural experiment to assess the impact of trade liberalisation in countries with a small and backward manufacturing sector. The empirical analysis is based on a new panel data base covering almost the total population of manufacturing firms in Chad and Gabon, and containing data spanning from the year before to two years after t he reforms. The paper finds that although firms’ response to changing incentives was non-negligible, with a shift of output from non tradables to tradables and an increase in productivity, the reform process was unable to generate a virtuous and self-sustained circle, where export expansion brings a generalized productivity increase which in turn feeds on further export growth.

Suggested Citation

  • Giorgio Barba Navaretti & Ricardo Faini & Bernard Gauthier, 2002. "The Impact of Trade Liberalisation on Enterprises in Small Backward Economies: The Case of Chad and Gabon," Cahiers de recherche 02-05, HEC Montréal, Institut d'économie appliquée.
    • Handle: RePEc:iea:carech:0205
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    trade liberalization; enterprise development; output; productivity and export performance;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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