Downloads

Elryah, Y., & Siddig, A. (2024). Trade Policy and Productivity Growth: Why Do Sudanese Manufacturing Firms Export Less. Economics & Management Information, 3(1), 1–16. https://doi.org/10.62836/emi.v3i1.98

Trade Policy and Productivity Growth: Why Do Sudanese Manufacturing Firms Export Less

This paper aims to study the role of trade policy on industrial development and productivity growth. We analyze the relationship between trade policy and productivity growth of manufacturing firms in Sudan. For this work, we evaluate the previous trade policy instruments that implemented between 2000 and 2022. The study finds that Sudan’s trade policy has significant positive effects on manufacturing firms’ productivity. The study reveals that manufacturing firms offer the largest scope for productivity gains through trade policies aiming at enhancing economic growth. The study also found there was a weak support for investment promotion and tariff protection. This study recommends that building a proper trade policy to support manufacturing firms and adopt new technologies and focusing on labor intensive industries are the key success to sustain productivity growth and enable manufacturing firms’ export.

productivity growth trade policy manufacturing firms

References

  1. Alamin HN. Export Performance in Sudan: Recent Trends and Policy Impact. Journal of Economic Cooperation among Islamic Countries 1997; 18(4): 57–76.
  2. Almosharaf HA, Tian FD. The Causes of Sudan’s Recent Economic Decline. IOSR Journal of Economics and Finance 2014; 2(4): 26–40. DOI: https://doi.org/10.9790/5933-0242640
  3. Yagoub E, Nadia H. STI Policies, Human Skills and Country Cases: Making Capital and Institutions work for Developing Agro-industries in Sudan. 2021; 21. Available online: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/http://www.iwim.uni-bremen.de/files/dateien/1843_adpy_22_contents___volume_22__11_2020.pdf (accessed on 23 August 2023).
  4. Bernard AB, Jensen JB, Redding SJ, Schott PK. Firms in International Trade. Journal of Economic Perspectives 2007; 21(3): 105–130. DOI: https://doi.org/10.1257/jep.21.3.105
  5. Van Biesebroeck J. Exporting Raises Productivity in Sub-Saharan African Manufacturing Firms. Journal of International Economics 2005; 67(2): 373–391. DOI: https://doi.org/10.1016/j.jinteco.2004.12.002
  6. Siddig K. Macroeconomics and Agriculture in Sudan: Analysis of Trade Policies, External Shocks, and Economic Bans in a Computable General Equilibrium Approach; Margraf Publishers: Weikersheim, Germany, 2010.
  7. African Development Bank Group. Promoting Bilateral Trade between Sudan and South Sudan. East Africa Regional Development & Business Delivery Office. Available online: https://www.afdb.org/en/documents/document/promoting-bilateral-trade-between-sudan-and-south-sudan-95396 (accessed on 23 August 2023).
  8. Kim DH, Lin SC. Trade and Growth at Different Stages of Economic Development. Journal of Development Studies 2009; 45 (8): 1211–1224. DOI: https://doi.org/10.1080/00220380902862937
  9. Nübler I. Industrial Policies and Capabilities for Catching Up: Frameworks and Paradigms. International Labour Organization, Geneva, Switzerland, 15 July 2011.
  10. Ali Gadir AA, Elbadawi A. Explaining Sudan’s Economic Growth Performance. AERC Collaborative Research Project on Explaining Africa's Growth Performance. Working paper NO.9, 2004.
  11. Amiti M, Jozef K. Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia. The American Economic Review 2007; 97(5): 1611–1638. DOI: https://doi.org/10.1257/aer.97.5.1611
  12. Balassa B. The Structure of Protection in Developing Countries; The Johns Hopkins University Press: Baltimore, MD, USA, 1971.
  13. Ebaidalla M, Atif A. Performance of Sudanese Agricultural Exports: A Gravity Model Analysis. 4th Annual Conference on: Structural Reform, Transformation and Sustainable Development in Post-Secession Sudan: Economic, Political and Social Perspectives, Khartoum, Sudan, 15–17 June 2015.
  14. Hamilton A. Secretary of the Treasury. Report on manufactures. Communicated to the House of Representatives; Columbia University Press: New York, NY, USA, 1934.
  15. List F. National System of Political Economy; J. B. Lippincott & Co: Philadelphia, PA, USA, 1856.
  16. Matthews R. The Economics of Institutions and the Source of Growth. Economic Journal 1986; 96: 903–18. DOI: https://doi.org/10.2307/2233164
  17. Chang, HJ. Globalization, Economic Development and the Role of the State; Third World Network and Zed Books: London, UK, 2003.
  18. Bernard AB, Jensen JB. Exceptional Exporter Performance: Cause, Effect, or Both?. Journal of International Economics 1999; 47(1): 1–25. DOI: https://doi.org/10.1016/S0022-1996(98)00027-0
  19. Edwards S. Trade Orientation, Distortions, and Growth in Developing Countries. Journal of Development Economics 1992; 39: 31–57. DOI: https://doi.org/10.1016/0304-3878(92)90056-F
  20. Lucas R. On the Mechanics of Economic Development. Journal of Monetary Economics 1988; 22(1): 3–42. DOI: https://doi.org/10.1016/0304-3932(88)90168-7
  21. Halpern L, Koren M, Szeidl A. Imported Inputs and Productivity. American Economic Review 2015; 105(12): 3660–3703. DOI: https://doi.org/10.1257/aer.20150443
  22. Krugman PR. Increasing Returns, Monopolistic Competition and International Trade. Journal of International Economics 1979; 9(4): 469–479. DOI: https://doi.org/10.1016/0022-1996(79)90017-5
  23. Krugman PR, Obstfeld M. International Economics: Theory and Policy; Pearson Education International: London, UK, 2003.
  24. Kathuria V, Natarajan RR. Is Manufacturing an Engine of Growth in India? Analysis in the Post Nineties. In Proceedings of the UNU-WIDER/UNU-MERIT/UNIDO Workshop, Pathways to Industrialization in the 21st Century, Maastricht, the Netherlands, 22–23 October 2009.
  25. Herzer D. Cross-country heterogeneity and the trade-income relationship. World Dev 2013; 44: 194–211. DOI: https://doi.org/10.1016/j.worlddev.2012.09.014
  26. Hirsch WZ. Transformation of New Knowledge for Economic Growth. California Management Review 1965; 7(3): 85–90. DOI: https://doi.org/10.2307/41165636
  27. Stiglitz J, Lin J, Monga C, Patel E. Economic Policy in the African Context. In Policy Research Working Paper; World Bank: Washington, DC, USA.
  28. Edwards S. Openness, Productivity, and Growth: What Do We Really Know?. Economic Journal 1998; 108(1): 383–98. DOI: https://doi.org/10.1111/1468-0297.00293
  29. McMillan M, Rodrik D. Globalization, Structural Change and Productivity Growth. In A. M. M. Bacchetta, Making Globalization Socially Sustainable; International Labor Organization and World Trade Organization: Geneva, Switzerland.
  30. Grossman GM, Helpman E. Innovation and Growth in the Global Economy; The MIT Press: Cambridge, MA, USA, 1993.
  31. Dixit A. Hysteresis, import penetration and exchange rate pass-through. Quarterly Journal of Economics 1989; 104(2): 205–280. DOI: https://doi.org/10.2307/2937845
  32. Sudan Central Bank. Annual Reports 2010–2022. Available online: https://cbos.gov.sd/en/periodicals-publications (accessed on 23 August 2023).
  33. Yagoub Elryah. On the Priorities of Comparative Advantage of Agro-industry Commodities: The way Towards Economic Transformation. Research in Business and Management 2019; 6(1): 13–47. List of abbreviations. DOI: https://doi.org/10.5296/rbm.v6i1.14377
  34. The World Bank Group. The World Bank Group and Statistical yearbook (various issues) from Sudan Central Bank; Central Bank of Sudan: Khartoum, Sudan, 2020.

Supporting Agencies

  1. Funding: This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.