Munich Personal RePEc Archive

Impact of Export Composition on Economic Growth in South Asia

Javed, Zanib and Munir, Kashif (2016): Impact of Export Composition on Economic Growth in South Asia.

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Abstract

The primary objective of this study is to analyze the impact of export composition on economic growth in South Asian countries (Bangladesh, India, Pakistan, and Sri Lanka) from 1990 to 2013. Vertical and horizontal export diversification and their relation with economic growth are also analyzed in this study. Export composition, vertical and horizontal exports diversification are augmented in Cobb-Douglas production function in three models respectively. Herfindal index is used for measuring the export composition that reveals export diversification exists in South Asian countries. Results showed that export composition and vertical export diversification have inverted U relationship with economic growth, while horizontal export diversification has U shape relationship with economic growth. Moving from primary exports to manufacture exports linked with economic growth via externalities of learning by doing as vertical exports are positively related with GDP. Government should encourage the exporters to increase diversification in their export portfolio and provide incentives and technical assistance for research and development to move the exports from primary sector to manufacturing sector.

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