LDC Competition in Export Markets

Abstract

The emerging international division of industrial labour resulting from the outward-oriented industrialisation process in the Third World creates various types of adjustment constraints in the international economy. For a developed country, new competition in manufactured trade is not only experienced in terms of increased import penetration, but also in terms of intensified export competition. Obviously, the nature and scope of this potential threat is subject to the specific competitive characteristics of each individual country. The major determinants in this respect are the physical size of a country, its available factor endowments, the level of the development of production forces, the pattern of international specialisation as well as the general policy orientation. The higher the degree of openness in the economy and the less diversified by composition and by destination its export structure is, the greater the disruptive potential of expanding manufactured exports from the Third World.