Social absorption capability, systems of innovation and manufactured export response to preferential trade incentives |
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Authors: | Abdelrasaq Na-Allah Mammo Muchie |
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Affiliation: | a Institute for Economics Research on Innovation, Tshwane University of Technology, 159 Skinner Street, Pretoria 0001, South Africa b Aalborg University, Denmark c SLPMTD, Department of International Development, Queen Elizabeth House, Oxford University, United Kingdom |
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Abstract: | In many extant analyses of the impact of non-reciprocal system of trade preferences it is typical to focus on the details of market access value of tariff concessions as explanation for why export of beneficiaries may or may not respond to incentives. Very often, the role that supply related factors can, and do play in the process is relegated to the background. This paper argues that the social absorption capability of a beneficiary's economy as expressed in her incumbent systems of innovation is a crucial determinant of export performance response. The experience of sub-Sahara African countries under the US African Growth and Opportunity Act apparel trade incentive is used as a classical illustration of this proposition. It is shown that the comparative efficiency of Lesotho, despite emerging from a relatively weak trade performance potential background, in recording the highest level of export success among beneficiaries of the scheme is a function of the relative efficiency of her systems of innovation. |
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Keywords: | Institution Social absorption capability Innovation system Trade preference Manufactured export Garment |
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