An export-led growth strategy is one where a country seeks economic development by opening itself up to international trade . The opposite of an export-led growth strategy is import substitution, where countries strive to become self-sufficient by developing their own industries.
What are export-oriented policies?
Export-oriented industrialization (EOI) sometimes called export substitution industrialization (ESI), export led industrialization (ELI) or export-led growth is a trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage .
Which country has adopted an export-led growth strategy?
The last thirty years have seen tremendous spread of the export-led growth paradigm. The strategy was pioneered by Germany and Japan in 1950s and 1960s. In the 1970s and 1980s it was adopted by the four East Asian Tigers— South Korea, Taiwan, Hong Kong, and Singapore .
What is export led growth hypothesis?
The export-led growth hypothesis (ELGH) postulates that export expansion is one of the main determinants of growth . It holds that the overall growth of countries can be generated not only by increasing the amounts of labour and capital within the economy, but also by expanding exports.
What is export promotion industrialization strategy?
Export promotion policies reflect the interest of national governments to stimulate exports. ... However, in policy circles export promotion or export oriented industrialization (EOI) is seen more often as an alternative development strategy to import substitution industrialization (ISI).
What is meant by export-oriented?
(ˈɛkspɔːtˌɔːrɪənˌteɪtɪd) or export-oriented. adjective. business. (of an industry, company, etc) mainly concerned with the export of goods or services . export -orientated industries/companies.
Is export-led growth good?
Advantages of export-led growth
Growing export sales provide revenues and profits for businesses which can then feed through to an increase in capital investment spending through the accelerator effect. Higher investment increases a country's productive capacity which then increases the potential for exports.
What is consumption led growth?
Increased consumption will encourage businesses to drive up production, which will lead to job creation and rising income, leading to a further increase in aggregate demand, and so on. ... When an economy embarks on consumption-led growth, its consumption will increase .
What is Mauritius main source of income?
The economy of Mauritius is a mixed developing economy based on agriculture, exports, financial services, and tourism . Since the 1980s, the government of Mauritius has sought to diversify the country's economy beyond its dependence on just agriculture, particularly sugar production.
What is import led growth?
Through the import of foreign technology, new knowledge transmitted into the economy (Grossman & Helpman, 1991; Lee, 1995; Mazumdar, 2001) and eventually augment growth. ... This assertion is hypothesized as the import-led growth (ILG) strategy.
How does export contribute to economic growth?
export growth may reflect a rise in the demand for the country's outputs , and this in turn will be realised in economic growth. II. by raising the level of exports, additional foreign exchange will be generated, and this facilitates the purchase of productive intermediate goods.
Is China Export led growth?
China's export-led growth is rooted in a double transition of structural change and demographic transition . Accession to the WTO has allowed China to fully integrate into the world system and capture the gains of its comparative advantage in abundant labour supply.
What is the difference between the actual growth rate and the long term growth rate?
Actual growth is the percentage increase in a country's real GDP and it is usually measured annually. It is caused by increases in AD. The long-term trend in growth rates is the long run expansion of the productive potential of an economy .
What are the examples of export promotion?
- Identification of products and markets.
- Location of new investment opportunities.
- Provision of trade information.
- Provision of support services e.g assistance with export procedures, product quality, export financing, transportation etc.
- Organising trade fairs and trade missions.
What are the benefits of export promotion?
- Boost production rate.
- Helps farmers to market their products and earn good income.
- It leads to specialization in different aspects of agriculture.
What is the purpose of export promotion?
What is export promotion? Export promotion is used by many countries and regions to promote the goods and services from their companies abroad . This is good for the trade balance and for the overall economy. Export promotion can also have incentive programs designed to draw more companies into exporting.
