Rethinking the Export-Led Growth Strategy in ASEAN Developing Economies
ASEAN STUDIES CENTRE WEBINAR
About the Webinar
This webinar explores the development of export diversification and its potential impact on economic growth in ASEAN. Typically, developing economies specialise in producing and trading goods, mainly commodities and primary goods, in which they have a comparative advantage. This model however leads to greater exposure to external adverse shocks, such as those due to trade instability and foreign demand variations. Contrary to the traditional model of trade, the Newly Industrialised Countries (NICs) of East Asia in the early 1970s had successful experiences in enlarging the production and trade of a variety of goods that contributed to strong growth in manufacturing value-added and gross domestic products. This highlights the importance of export diversification which should be included as part of the export-led growth strategy in ASEAN developing economies.
The webinar also discusses the role of export diversification and sophistication in stimulating economic growth using cross-country analysis. For developing countries, the positive linkage between export diversification and economic development is unequivocal. However, it is still unclear how and through which channels an economy’s diversification causes an increase in its income per capita. One possible channel might be its impact on productivity. On the one hand, export diversification may directly impact the growth of productivity via technological progress. On the other hand, it can structurally affect economic growth in the long run through economies of scale. Considering three country groups, namely Developing Asian countries (including ASEAN developing countries), Sub-Saharan African countries, and OECD founder members, over the period 1995-2017, the webinar discusses the impact of export diversification on productivity growth heterogeneity according to the country’s income level. Export concentration is a transitional step and should be favoured only in the first stage of economic development. Thereafter, export diversification and sophistication should become key drivers of economic growth through increasing returns to scale. Our findings highlight some policy implications for ASEAN countries. Better export performance should be accompanied by an improvement in diversification and sophistication of the export basket.
About the Speakers
Dr Phi Minh Hong is an ASEAN Graduate Fellow at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute and Assistant Professor at the Faculty of Law, Economics and Management of the University of Rouen Normandy, France. Dr Hong at the same time is a Lecturer at the Faculty of International Economics of the Foreign Trade University Hanoi, Vietnam, and a Research Fellow at Laboratoire d’Analyse des Sociétés, Transformations et Adaptation (LASTA) which is affiliated to the University of Rouen Normandy. Her research focuses on international trade, development economics and productivity in developing countries. Dr Hong has published extensively in academic journals, including Post-Communist Economies, Journal of International Trade and Economic Development, International Economics.
Dr Elodie Mania is Assistant Professor at the Faculty of Law, Economics and Management of the University of Rouen Normandy, France. She is also a Research Fellow at Laboratoire d’Analyse des Sociétés, Transformations et Adaptation (LASTA). Dr Mania’s research interest revolves around development economics, international macroeconomics, international trade and environmental economics. Her research that focuses on economic issues related to trade diversification, the vulnerability of growth models in developing countries to macroeconomic instabilities, and environmental issues has been published in the Journal of International Development or Structural Change and Economic Dynamics, amongst others. Dr Mania is currently working on a comparative study with a focus on the interactions between trade performance and economic growth in developing regions.
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