IDEAS home Printed from https://ideas.repec.org/p/pas/asarcc/2004-10.html
   My bibliography  Save this paper

Complementarity of Trade and FDI Liberalization in Industrial Growth: Lessons from Sri Lanka

Author

Listed:
  • Prema-chandra Athukorala
  • Sisira Jayasuriya

Abstract

This paper examines industrialisation experience in Sri Lanka following the market-oriented policy reforms initiated in 1977, with emphasis on the complementarity of trade and foreign direct investment (FDI) policies in shaping the reform outcome. It is found that the reforms helped to transform a primary product exporting economy into one in which manufactures dominate exports. Improved performance of domestic manufacturing through greater export orientation saw improvement in output and total factor productivity growth, and employment generation. The Sri Lankan experience highlights the complementary role of investment liberalisation for exploiting the potential gains from trade liberalisation. This industrialisation outcome is particularly impressive given that it occurred during a period of persistent civil strife and macroeconomic instability.

Suggested Citation

  • Prema-chandra Athukorala & Sisira Jayasuriya, 2004. "Complementarity of Trade and FDI Liberalization in Industrial Growth: Lessons from Sri Lanka," ASARC Working Papers 2004-10, The Australian National University, Australia South Asia Research Centre.
  • Handle: RePEc:pas:asarcc:2004-10
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2004/WP2004_10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Prema-Chandra Athukorala & Sisira Jayasuriya, 2005. "Liberalisation and Industrial Growth: Lessons from Sri Lanka," Palgrave Macmillan Books, in: Raghbendra Jha (ed.), Economic Growth, Economic Performance and Welfare in South Asia, chapter 6, pages 102-118, Palgrave Macmillan.
    2. Premachandra Athukorala, 1995. "Foreign Direct Investment and Manufacturing for Export in a New Exporting Country: The Case of Sri Lanka," The World Economy, Wiley Blackwell, vol. 18(4), pages 543-564, July.
    3. Harberger, Arnold C., 1996. "Reflections on economic growth in Asia and the Pacific," Journal of Asian Economics, Elsevier, vol. 7(3), pages 365-392.
    4. Nayyar, Deepak, 1978. "Transnational Corporations and Manufactured Exports from Poor Countries," Economic Journal, Royal Economic Society, vol. 88(349), pages 59-84, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. AM.Priyangani Adikari & Haiyun Liu & MMSA. Marasinghe, 2021. "Inward Foreign Direct Investment-Induced Technological Innovation in Sri Lanka? Empirical Evidence Using ARDL Approach," Sustainability, MDPI, vol. 13(13), pages 1-16, June.
    2. Kaminski, Bartlomiej & Ng, Francis, 2013. "Increase in protectionism and its impact on Sri Lanka's performance in global markets," Policy Research Working Paper Series 6512, The World Bank.
    3. Zulfadhli, 2018. "Determination of Industrial Competitiveness on Manufacturing Industry Growth in Palembang City," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(3), pages 238-254, July.
    4. Jayasinghe, Maneka & Chai, Andreas & Ratnasiri, Shyama & Smith, Christine, 2017. "The power of the vegetable patch: How home-grown food helps large rural households achieve economies of scale & escape poverty," Food Policy, Elsevier, vol. 73(C), pages 62-74.
    5. Garry Pursell & F.M. Ziaul Ahsan, 2011. "Sri Lanka's Trade Policies: Back to Protectionism," ASARC Working Papers 2011-03, The Australian National University, Australia South Asia Research Centre.
    6. Priyanga Dunusinghe, 2009. "On Export Composition and Growth," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(2), pages 275-304, July.
    7. Salah A. Nusair, 2008. "Purchasing Power Parity under Regime Shifts: An Application to Asian Countries," Asian Economic Journal, East Asian Economic Association, vol. 22(3), pages 241-266, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prema-chandra Athukorala, 2006. "Outward-oriented Policy Reforms and Industrialisation," Journal of South Asian Development, , vol. 1(1), pages 19-49, April.
    2. Nagesh Kumar, 1998. "Multinational enterprises, regional economic integration, and export-platform production in the host countries: An empirical analysis for the US and Japanese corporations," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(3), pages 450-483, September.
    3. Arunatilake, Nisha & Jayasuriya, Sisira & Kelegama, Saman, 2001. "The Economic Cost of the War in Sri Lanka," World Development, Elsevier, vol. 29(9), pages 1483-1500, September.
    4. Hartmut Elsenhans, 1987. "Absorbing Global Surplus Labor," The ANNALS of the American Academy of Political and Social Science, , vol. 492(1), pages 124-135, July.
    5. Jean-Louis Mucchielli, 1984. "Investissements internationaux et dynamique des avantages comparatifs des nouveaux pays industrialisés," Revue Économique, Programme National Persée, vol. 35(3), pages 537-570.
    6. Hill, Hal, 2001. "Technology and Innovation in Developing East Asia: An interpretive Survey," Departmental Working Papers 2001-11, The Australian National University, Arndt-Corden Department of Economics.
    7. Lewin, Arie Y. & Volberda, Henk W., 2011. "Co-evolution of global sourcing: The need to understand the underlying mechanisms of firm-decisions to offshore," International Business Review, Elsevier, vol. 20(3), pages 241-251, June.
    8. Manuel Madrid-Aris, 1997. "Growth and Technological Change in Cuba," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 7.
    9. Glenn Jenkins & CHUN-YAN KUO, 1998. "Andean Highway Pass Program, Financial and Economic Appraisal," Development Discussion Papers 1998-05, JDI Executive Programs.
    10. repec:ilo:ilowps:248521 is not listed on IDEAS
    11. Tilak Abeysinghe & Ananda Jayawickrama, 2008. "Singaporeã¢Â‚¬Â„¢S Direct Investment In Sri Lanka : Past Experience And Future Prospects," Microeconomics Working Papers 22559, East Asian Bureau of Economic Research.
    12. Groß, Martin, 1986. "Intrafirm trade with ASEAN countries by Japanese and US multinational corporations," Kiel Working Papers 273, Kiel Institute for the World Economy (IfW Kiel).
    13. Peter Maskell & Torben Pedersen & Bent Petersen & Jens Dick-Nielsen, 2007. "Learning Paths to Offshore Outsourcing: From Cost Reduction to Knowledge Seeking," Industry and Innovation, Taylor & Francis Journals, vol. 14(3), pages 239-257.
    14. Muzurura, Joe, 2016. "Determinants of foreign direct investment (FDI) in Zimbabwe: What factors matter?," MPRA Paper 99873, University Library of Munich, Germany, revised 04 Jun 2016.
    15. Prema-Chandra Athukorala & Bambang H Santosa, 1996. "Gains from Export Growth: Do Linkages Matter?," Departmental Working Papers 1996-13, The Australian National University, Arndt-Corden Department of Economics.
    16. Rahapakse, Purnima & Arunatilake, Nisha, 1997. "Would a reduction in trade barriers promote intra-SAARC trade?: A Sri Lankan perspective," Journal of Asian Economics, Elsevier, vol. 8(1), pages 95-115.
    17. Magnus Blomstrom & Irving B. Kravis & Robert E. Lipsey, 1988. "Multinational Firms and Manufactured Exports from Developing Countries," NBER Working Papers 2493, National Bureau of Economic Research, Inc.
    18. Sandwip Kumar Das & Manoj Pant, 2006. "Incentives for Attracting FDI in South Asia," International Studies, , vol. 43(1), pages 1-32, January.
    19. Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-398, March.
    20. Kohpaiboon, Archanun, 2006. "MNEs and the Global Integration of Thailand’s Processed Food Exports: A Firm-Level Study," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 3(01-2), pages 1-20, December.
    21. Mohd Noor, Abd Halim, 2000. "Technological Effort in Developing Countries: Multinational Corporations in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 34, pages 39-58.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pas:asarcc:2004-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Raghbendra Jha The email address of this maintainer does not seem to be valid anymore. Please ask Raghbendra Jha to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/asanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.