Imported Intermediate Inputs and Export Diversification in Low-Income Countries

Abstract

Economists and policy‐makers have advocated the need of developing countries, and in particular low‐income countries, of moving away from exclusively producing commodities and into manufacturing, and of increasing the value‐added of their products. For instance, Simon Johnson, Jonathan Ostry and Arvind Subramanian (2007) find this to be one of the key constraints on growth in African countries. This paper studies the role of imports of intermediate inputs as a determinant of export diversification and of transitions along supply chains towards producing more downstream products. The discussion is centered on the experience of low income countries and in particular, Sub‐Saharan countries. The analysis studies detailed trade level data spanning the period 1962‐2000, and exploits variation in trade policy across time, countries and industries.

Citation

Benguria, F. Imported Intermediate Inputs and Export Diversification in Low-Income Countries. Presented at Joint RES-SPR Conference on “Macroeconomic Challenges FacingLow-Income Countries,” Washington, DC, January 30–31, 2014. International Monetary Fund, Washington DC, USA (2014) 29 pp.

Imported Intermediate Inputs and Export Diversification in Low-Income Countries

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