MODELING AGGREGATE MANUFACTURED EXPORTS FOR SOME ASIAN NEWLY INDUSTRIALIZED ECONOMIES

A central question in studies of the Asian Newly Industralised Economies (NIEs) has been whether the extremely rapid export growth of these countries can be viewed as primarily a phenomenon of income-elastic export demand or of fast-expanding export supply in the face of highly price-elastic demand. This paper provides evidence to show that, whilst high income elasticities of export demand are detected using a conventional simultaneous model, this may conceal the presence of important product differentiation and product innovation effects on export demand. These are then captured using a measure of the total resource base.