Export Competitiveness - Fuel Price Nexus in Developing Countries: Real or False Concern?
IMF Working Papers, February 4, 2019
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- Export Competitiveness - Fuel Price Nexus in Developing Countries: Real or False Concern?
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Bibliographic details
- Authors: Kangni R Kpodar, Stefania Fabrizio, Kodjovi M. Eklou
- Published: February 4, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484387771.001
Research question and methodology
- Investigates the impact of domestic fuel price increases on export growth in a sample of 77 developing countries over the period 2000-2014.
- Empirical approaches:
- Fixed-effect estimator.
- Local projection approach.
Key findings
- An increase in domestic gasoline or diesel price adversely affects real non-fuel export growth.
- The adverse effect is short-lived: the impact phases out within two years after the shock.
- The negative effect of a fuel price increase on exports is mainly noticeable in:
- Countries with a high-energy dependency ratio.
- Countries where access to an alternative source of energy, such as electricity, is constrained, preventing producers from altering energy consumption mix in response to fuel price changes.
Subjects and keywords (as provided)
- Subjects: Energy prices, Export performance, Fuel prices, Inflation, International trade, National accounts, Prices, Real exports.
- Keywords: cross price elasticity, Developing countries, diesel pump price, energy price shock, Energy prices, Europe, export growth, Export performance, fuel price hike, fuel price increase, Fuel prices, Fuel Subsidies, gasoline pump price, Inflation, input cost, price change, price shock, pump price, Real exports, Retail fuel prices, stabilization fund, WP.