文档介绍：Chapter 5
TRADE, COMPETITIVENESS
AND FOREIGN INVESTMENT
AND THE LINKAGES AMONG
THEM
OUTER-ORIENTATION: THE STRATEGIC
STANCE
The conventional wisdom of the 1990s is that growth prospects for develop-
ing countries are greatly enhanced if they adopt an outer-oriented strategy and
fairly uniform incentives—primarily through the exchange rate—for produc-
tion, which includes production for exporting and peting
Outer-orientation inter prises strategies followed in the area of trade,
investment and exchange rate. The chosen policy framework in these imperative
policy areas can determine whether an economy would eed in climbing on
to the high growth trajectory, or would settle for a low-level equilibrium for an
inordinate period. Policies and growth experiences of dynamic Asian economies
in these areas are widely considered valuable for the developing economies.
Economists have debated for decades whether there is a positive link be-
tween openness to trade and investment, or liberalization of policy stance on
the one hand, and economic performance on the other. Although there is no
consensus, it is widely agreed that outer-orientation or liberalization of trade
and investment regimes spurs efficiency gains and promotes real GDP growth
(Section ). Both trade and foreign direct investment (FDI) are regarded as fa-
cilitators of growth and development. They individually have a direct bearing on
GDP growth, and concurrently have an indirect impact through their linkages.
However, establishing a causal link has not been possible. In addition, evidence
151 For a recent analysis of the concept of outer-orientation refer to Krueger (1997).
148 Chapter 5
at the microeconomic level points in the same direction. Asian firms that ei-
ther were export-oriented or had foreign partnership of some ilk were found to
be far more productive than the totally domestic-oriented firms. Productivity
differences of 40 percent were found between the