Dynamics of Export Performance, Productivity and Real Effective Exchange Rate in Manufacturing: The Case of Cameroon

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Periodical article

Title:	Dynamics of Export Performance, Productivity and Real Effective Exchange Rate in Manufacturing: The Case of Cameroon
Author:	Söderling, Ludvig
Year:	2000
Periodical:	Journal of African Economies
Volume:	9
Issue:	4
Period:	December
Pages:	411-429
Language:	English
Geographic term:	Cameroon
Subjects:	industry industrial exports Economics and Trade
External link:	https://jae.oxfordjournals.org/content/9/4/411.full.pdf
Abstract:	In this study, a sample of 38 manufacturing firms from Cameroon is examined for the period 1980-1995. A production function and an export function are estimated in order to study the determinants of total factor productivity (TFP) and export performance. The results demonstrate a mutually reinforcing relationship between manufacturing productivity and export performance. Moreover, the study provides evidence indicating that adequate management of real exchange rate is crucial for the promotion of manufacturing exports. The performance of the manufacturing sector in Cameroon has deteriorated substantially since the mid-1980s. This decline is to a large degree explained by Dutch disease symptoms and inward-looking policies for the manufacturing sector, resulting in a highly overvalued real effective exchange rate (REER). Based on the estimated export and production functions, a simple dynamic model is constructed to assess the cost of this REER overvaluation, in terms of both productivity and exports. App., bibliogr., notes, sum.