Publication:
Export Surges : The Power of a Competitive Currency

Loading...
Thumbnail Image
Files in English
English PDF (279.22 KB)
970 downloads
English Text (127.32 KB)
152 downloads
Date
2008-10
ISSN
Published
2008-10
Abstract
How can countries stimulate and sustain strong export growth? To answer this question, the authors examine 92 episodes of export surges, defined as significant increases in manufacturing export growth that are sustained for at least seven years. They find that export surges in developing countries tend to be preceded by a large real depreciation-which leaves the exchange rate significantly undervalued-and a reduction in exchange rate volatility. In contrast, in developed countries, the role of the exchange rate is less pronounced. The authors examine why the exchange rate is so important in developing countries and find that the depreciation leads to a significant reallocation of resources in the export sector. In particular, depreciation generates more entries into new export products and new markets, and the percentage of new entries that fail after one year declines. These new products and new markets are important, accounting for 25 percent of export growth during the surge in developing countries. The authors argue that maintaining a competitive currency leads firms to expand the product and market space for exports, inducing a large reorientation of the tradable sector.
Link to Data Set
Citation
Freund, Caroline; Pierola, Martha Denisse. 2008. Export Surges : The Power of a Competitive Currency. Policy Research Working Paper; No. 4750. © World Bank, Washington, DC. http://hdl.handle.net/10986/6937 License: CC BY 3.0 IGO.
Report Series
Report Series
Other publications in this report series
  • Publication
    Are Short-Term Gains in Learning Outcomes Possible? Evidence from the Malawi Education Sector Improvement Project
    (Washington, DC: World Bank, 2024-07-17) Asim, Salman; Gera, Ravinder Casley
    This paper presents evidence of the impact of a five-year package of interconnected interventions intended to improve learning environments in eight disadvantaged districts in Malawi. The intervention, which was implemented over five years, provided additional finance to schools to support the hiring of additional teachers and construction of learning shelters to improve class sizes in lower primary, along with constructing classrooms and providing results-based finance to reward improvements in staffing. The interventions were targeted to eight districts with longstanding disadvantages in staffing, learning environments, and learning outcomes, particularly for girls. Employing administrative data and data from a nationally representative independent sample of public primary schools, the analysis finds that these investments closed the gap in learning outcomes between the targeted districts and the rest of Malawi. There is also suggestive evidence that the program reduced learning gaps between girls and boys. The findings suggest that even in a low-income environment with significant constraints, targeted efforts to reduce class sizes can close district-level gaps in learning.
  • Publication
    The Fertility Impacts of Development Programs
    (Washington, DC: World Bank, 2024-07-17) Donald, Aletheia; Goldstein, Markuz; Koroknay-Palicz, Tricia; Sage, Mathilde
    This paper examines how women’s fertility responds to increases in their earnings and household wealth, using six experiments conducted in Sub-Saharan Africa. Contrary to predictions that an increase in female earnings raises the opportunity cost of childbearing and that this will lower fertility, the findings show that an increase in the profits of female business-owners in Ethiopia and Togo results in them having more children. The findings also show a positive fertility response to increases in the value of household assets induced by land formalization programs in Benin and Ghana. These results are driven by women who are in most need of sons for support in old age or in the event of widowhood. The findings suggest that women’s lack of long-term economic security is an important driver of fertility in Sub-Saharan Africa.
  • Publication
    Does Effective School Leadership Improve Student Progression and Test Scores? Evidence from a Field Experiment in Malawi
    (Washington, DC: World Bank, 2024-07-17) Asim, Salman; Gera, Ravinder Casley; Harris, Donna; Dercon, Stefan
    Evidence from high-income countries suggests that the quality of school leadership has measurable impacts on teacher behaviors and student learning achievement. However, there is a lack of rigorous evidence in low-income contexts, particularly in Sub-Saharan Africa. This study tests the impact on student progression and test scores of a two-year, multi-phase intervention to strengthen leadership skills for head teachers, deputy head teachers, and sub-district education officials. The intervention consists of two phases of classroom training along with follow-up visits, implemented over two years. It focuses on skills related to making more efficient use of resources; motivating and incentivizing teachers to improve performance; and curating a culture in which students and teachers are all motivated to strengthen learning. A randomized controlled trial was conducted in 1,198 schools in all districts of Malawi, providing evidence of the impact of the intervention at scale. The findings show that the intervention improved student test scores by 0.1 standard deviations, equivalent to around eight weeks of additional learning, as well as improving progression rates. The outcomes were achieved primarily as a result of improvements in the provision of remedial classes.
  • Publication
    Connectivity, Road Quality, and Jobs
    (Washington, DC: World Bank, 2024-07-17) Pkhikidze, Nino
    Good road infrastructure decreases travel time and improves accessibility to urban areas. Improved rural-urban linkages could also affect rural employment through decreased time and travel costs. To study this link, the paper analyzes the impact of good quality roads on agricultural and non-agricultural jobs in Armenia, using different sets of data and different methodological approaches. To address endogeneity and reverse causality issues of road quality, the paper uses a historical instrumental variable obtained by digitizing historical roads which were mainly used for military purposes - from a military-topographic map of the Caucasus from 1903. The results show that a shorter distance to a good quality road has a statistically significant positive impact on overall non-agricultural employment for men and women, increasing the likelihood of cash-earning jobs for rural women and skilled manual and non-seasonal employment for rural men. People are more likely to work outside their villages and work for more hours if they have access to good quality roads. The results are robust from the analysis of Demographic and Health Survey as well as the Integrated Living Conditions Survey of Armenia.
  • Publication
    Therapy, Mental Health, and Human Capital Accumulation among Adolescents in Uganda
    (Washington, DC: World Bank, 2024-07-17) Baird, Sarah; Ozler, Berk; Dell'Aira, Chiara; Parisotto, Luca; Us-Salam, Danish
    Using a cluster-randomized trial, this paper evaluates the impact of group-based interpersonal therapy on mental health and human capital accumulation among adolescent girls in Uganda who were at risk of moderate or severe depression at baseline. The study was designed to test whether lay provider–led group-based interpersonal therapy for adolescents could be effectively scaled up using modest resources in a low-income country. It also tested whether a lump-sum cash transfer offered at the end of therapy provided any additional benefit. The findings show that group-based interpersonal therapy increased the share of adolescents with minimal depression by 20-30 percent 12 months after therapy, but these effects dissipated by the 24-month follow-up. Small short-term effects on human capital accumulation were also not sustained at 24 months. Surprisingly, the marginal effect of providing cash transfers to group-based interpersonal therapy beneficiaries on mental health was large and negative, persisting two years after baseline. The paper provides suggestive evidence that the adolescents were frustrated by their inability to use the cash toward their own goals because of the need to divert funds toward the essential needs of their families during the COVID-19 pandemic.
Journal
Journal Volume
Journal Issue
Associated URLs
Associated content
Citations