The Stage of Development and the Nature and Magnitude of Export Related Growth

This paper examines the role of export expansion in the economic growth of countries at different levels of development. Results from a switching regression model with data-determined group selection indicate that exports contribute to growth through both an externality effect and an allocation efffect for middle income countries, but only through an allocation effect for low income countries. The difference in the magnitude of the contribution of exports to growth between the two groups of countries is not very large, but it is greater for middle income countries