The Technological Diffusion as a Dimension of the Link Between Exports, Imports, and Growth in Tunisia

The Technological Diffusion as a Dimension of the Link Between Exports, Imports, and Growth in Tunisia

Amene Khalifa (University of Tunis El Manar, Tunis, Tunisia)
Copyright: © 2019 |Pages: 19
DOI: 10.4018/IJABE.2019070103

Abstract

This paper is an exploration of the technological dimension that shapes the link between intermediate and capital goods imports (IKGM), manufactured exports (MX), and growth in the case of Tunisia. Within a time series analysis (1970-2016), the author focuses on the extent to which these two components of trade are differentiated and therefore incorporating increasing technological content. By using three-digit SITC-level data of IKGM and of MX, it is shown that weighing simple measures of exports and of imports with a measure of their differentiation reveals that exports are sufficiently differentiated to ensure technological spillovers, on one hand, and the payment of IKGM, on the other hand. The extensive and intensive margins of trade are also explored from the sides of exports and imports. They are put in evidence given the positive impact on growth of IKGM and MX measured in accordance to their differentiated configuration.
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Introduction

The majority of arguments invoked to justify the export-led growth hypothesis incorporate a technological dimension. Positive externalities, demonstration and training effects in export markets and the competitive pressure (Balassa, 1978; Feder, 1983; Kavoussi, 1984; Kohli & Singh, 1989; Michaelly, 1977; Ram, 1985;..) imply technological spillovers: for Grossman & Helpman (1991), interactions with foreign customers provide local exporters with styles and quality standards of the final products, new methods of production and management, many technical information relative to intermediate inputs used in production and so on. The argument of scale economies exploitation, is within a dynamic context, a source of productivity gains thanks to technological spillovers: the accumulation of experience due to production scale increase is not subject to the hypothetic diminishing returns since participating in export markets is a source of foreign technological spillovers (Krugman, 1987). Likewise, Fernandes & Isgut (2005) propose, via the Arrow’s learning by doing approach, an interpretation of the auto-selection versus learning by doing hypothesis (Baldwin & Gu, 2003; Bernard & Jensen, 1999; Bernard & Wagner, 1997; Blalock & Gertler 2004; Girma et al., 2004; Hahn, 2004, Krâay, 1999;): Exporting firms established in foreign markets for a long time are characterized by less performance than new exporters given the sharp diminishing returns to experience enhanced by repeating the same problem. However, plants breaking newly into export markets benefit from experience increase because they have to confront new challenges which enhance significant technological spillovers.

Even for the argument relative to the reduction of foreign shortage by exports receipts [Chenery & Bruno, 1962; Mac Kinnon, 1964; Taylor, 1991), export-led-growth is caused by productivity gains thanks to regular intermediate and capital goods imports (IKGM) which incorporate increasing technological content. There are several studies highlighting the role of (IKGM) as shaping the link between exports and growth (Castellani, 2002; Helleiner, 1986; Lensink, 1995; Pack & Page, 1994; Thirwall, 2000).

Esfahani (1991) is the most current work that emphasizes, exclusively, on the function of exports as the main source of foreign exchange for IKGM payments. By using data on a set of semi industrialized countries, the author finds that the significant contribution of exports to growth is implicitly that of IKGM which payment is ensured by exports earning. Khalifa (2015) found similar results regarding the prevalence of the imports shortage by considering, in the case of Tunisia, annual data ranging from 1970 to 2004. Esfahani’s hypothesis about the role of exports as a source of foreign exchange for the much needed IKGM is originated from the two gap models (Mac Kinnon, 1964): If the gap between saving and investment is less important than the gap between the minimal IKGM and exports, the economy must request for foreign financial resources. Obviously, if the net factor incomes plus transfers are left out, the latter situation is associated to a current account deficit which can also be overcome by the supply increase of foreign exchange.

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