Export Competitiveness - Fuel Price Nexus in Developing Countries: Real or False Concern?

Information about Asia and the Pacific Asia y el Pacífico
Export Competitiveness - Fuel Price Nexus in Developing Countries: Real or False Concern?
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Volume/Issue:
2019/25
Series:
IMF Working Papers
Author(s):
Kangni Kpodar, Stefania Fabrizio, and Kodjovi Eklou
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
February 2019
DOI:
http://dx.doi.org/10.5089/9781484387771.001
ISBN:
9781484387771
ISSN:
1018-5941
Page:
34
This paper investigates the impact of domestic fuel price increases on export growth in a sample of 77 developing countries over the period 2000-2014. Using a fixed-effect estimator and the local projection approach, we find that an increase in domestic gasoline or diesel price adversely affects real non-fuel export growth, but only in the short run as the impact phases out within two years after the shock. The results also suggest that the negative effect of fuel price increase on exports is mainly noticeable in countries with a high-energy dependency ratio and countries where access to an alternative source of energy, such as electricity, is constrained, thus preventing producers from altering energy consumption mix in response to fuel price changes.
Article

Export Competitiveness - Fuel Price Nexus in Developing Countries: Real or False Concern?1

Author(s):
Kangni Kpodar, Stefania Fabrizio, and Kodjovi Eklou
Published Date:
February 2019
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