Historical studies have provided empirical validation of the view that growth performance is more satisfactory under export promotion strategies than under import substitution strategies. The studies by Kruegor (1928) and Bhawati (1978) and Papageogious, et al., (1991) suggested that import substitution industrialization policies generally did not produce sustainable increases income per capita and thus, export promotion policies were more appropriate for achieving increases in per capita income.
Gunasekera
(1992), examined the pattern of intra-industry trade in manufacturing of newly
industrialised countries (NICs) of South-East Asia. His interest was in
determining the major economic theory likely to guide the pattern of trade
especially in newly industrialized countries as their economic continue to grow
and how pattern are changing in newly industrialized countries. The conceptual
theoretical framework seems to be the theory of dynamic comparative cost to
explain intra-industry trade. He considered the role of product
differentiation, economies of scale, and monopolistic competition.
His
studies shows the importance of intra-industry in total trade and that the East
Asia newly industrialized countries changing patterns of export in the 1970’s
and 1980’s showed substantial growth of intra-industry trade in manufacturing,
with the major industrial trading countries such as the United states, the
European community and Japan. He conducted that the growing intra-industry
trade in manufactures will allow markets in developing countries to accommodate
the exports of developing countries that are at earlier stages of industrialization.
Rodney
(1993) examines the advantages in intra-industry trade during the 1980’s. He
observed that imperfect competition, suggest that as developing countries
increase the manufactured exports and therefore intra-industry trade, these
exports will encounter entry barriers characteristics of oligopolistic
competition. Since multinational links are important in overcoming trade
barriers, developing countries that have had and accepting attitude toward
multination companies may be the ones best able to capture these export
markets.
Ayali (1969), emphasizing on the study of
export promotion and its relationship with a country’s Balance of Trade and the
growth of its GDP, collected data on the export of selected goods from Nigeria
between (1958-1967). His study revealed significant relationship between export
promotion and both the country’s balance of trade and Gross Domestic product.
But despite the finding of this study he concluded his study by stating that
though export promotion at the preliminary level can lead to a positive balance
of trade but it does not guarantee a positive balance of payment as the value
of the exporting country’s currency may not command the same level of exchange
with the internationally accepted unit of measurement i.e its dollar or the
British pound sterling.
Tyle (1981) investigates whether countries
pursuing export promotion policies grow faster than those that are not pursuing
it. Specifically, he sought to determine the precise export growth, economic
policies and economic growth using a sample of 55 middle-income developing
countries for the period 1960-1977. His result revealed a positive correlation
between growth and export expansion as well as capital formation and economic
growth.
His result was consistent with the previous
studies conducted by Michealy (1977) and Balassa (1978). While Michealy found a
positive association between per capital income growth and proportional in
export-GNP for 23 most developed countries in the sample and no relationship
for the poorest countries in the sample. Balassa found strong and statistically
significant positive correlation between export expansion and economic growth
for 11 countries such as Korea and Taiwan and poor performing countries such as
Chile and India.
Ukpolo (1994) in his study conducted on some
African countries including Nigeria where a time series regression of output on
disaggregated export was done. He used data from real Gross Domestic Product
(GDP), Export of fuel, non-fuel primary products and manufactures sizes of
public and private sectors. Evidence of export-led growth was found but he
based his result on export for non-fuel primary products and income. However, a
number of empirical studies which have investigated the export-led growth
hypothesis have found that export have been instrumental to Nigeria growth
performance suggesting that in Nigeria export-led growth hypothesis holds a
solid impact on the growth of the economy if properly looked into (Fahan, 1979,
Expo and Eqgwaikhidi, 1994).
Similarly, Chow (1987), performed an analysis
on eight (8) of the most successful export-oriented newly industrialised
countries (NICs) using the growth rate of manufacturing output as a measure of
industrial development with two exceptions. Chow found bi-directional causality
in each country.
Unlike these two works, Serletis (1992), also
includes the growth of imports in his analysis. In Canadian data from
1970-1985, he found that export growth causes Gross National Product growth,
over the few sample and at the same time. He found no evidence that import
growth causes either export growth or income growth. The empirical
evidence shown above, have it obviously that export promotion/export-let growth
and policies have a positive effect on the growth of any economy.
ARTICLE SOURCE: CHIAMAKA NANCY OKEAGU
ECONOMICS DEPARTMENT, EBONYI STATE UNIVERSITY