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International Journal of Business Studies and Innovation

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Vol.1, Iss.1, September 2021

 IJBSI 2021/9
Vol.1, Iss.1 : 59-67
The Impact of Terms of Trade on the Export Structure of Manufactured Products in Different Economic Developing Status

Kai-Ting Huang1*
1The Queen’s University of Belfast, United Kingdom

The Prebisch-Singer Hypothesis states that in structural time series analysis, the terms of trade between primary products and manufacturers have a negative deterministic trend. Many researchers argued that the deterioration in trade is the type of country in which the products are exported, regardless of whether the types of products exported by such countries are primary or manufactured products. This paper employs a development-differentiated model to analyze the correlation between various terms of trade and the export proportion of manufactured products on different economies of development status. In the long run, stable co-integration relations exist between terms of trade and the export proportion of manufactured products for development status. Furthermore, the increased proportion of manufactured products exports is the Granger casualty for the worse terms of trade for several economies of development status. The results demonstrated that changing the terms of trade is significantly influenced by structured changes in the export proportion of manufactured products for the development status of economies.

Keywords:  Prebisch-Singer Hypothesis; Deterioration of Terms of Trade; Export Structure

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© 2021   , ISSN 2737-5331