Tipping the scales in emerging economies: the role of exports and their drivers within the growth model perspective

What the paper says

The article contributes to the discussion around export competitiveness in the context of the growth models perspective within the interdisciplinary research agenda of Post Keynesian Economics and comparative political economy. It claims that the Sraffian supermultiplier growth decomposition and the growth driver approach are complementary, assembling a solid framework for analyzing the political economy of growth and its determinants. The empirical investigation consists of two steps. First, demand-led growth accounting is employed to investigate the economic performance of a sample of emerging economies before and after the 2008–2009 global economic crisis. Exports were categorized as the primary source of growth for all these economies before the crisis. The overall decrease in exports following the crisis is accompanied by lower average growth rates, which highlights the importance of understanding export competitiveness factors to elucidate the growth dynamics in these economies. Thus, in the second step, panel data estimations examine export drivers. The results indicate that foreign demand, real effective exchange rate depreciation, and participation in global value chains positively impact export growth. Although these results emphasize the importance of price-competitiveness factors, additional estimates show that as economies reach higher levels of complexity, they transition away from relying on low relative prices, with non-price factors playing an increasingly important role in fostering exports.