Stimulating Non-Energy Exports in Trinidad and Tobago: Evidence from a Small Petroleum-Exporting Economy Experiencing the Dutch Disease

The motivation for this study hinges around the fact that Trinidad and Tobago (T&T) is suffering from the Dutch disease which inadvertently hinders the growth of non-energy exports. This paper examines measures that can be adopted for a small petroleum-exporting economy to dampen the effect of Dutch disease by promoting non-energy trade. This paper is novel and contributes to the literature in using panel data for the T&T case, as it investigates the effect of a devaluation of the TT dollar in order to stimulate non-energy exports (a combination of agriculture and manufacturing trade).... Mehr ...

Verfasser: Roger Hosein
Leera Boodram
George Saridakis
Dokumenttyp: Artikel
Erscheinungsdatum: 2022
Reihe/Periodikum: Journal of Risk and Financial Management, Vol 15, Iss 36, p 36 (2022)
Verlag/Hrsg.: MDPI AG
Schlagwörter: Trinidad and Tobago / Marshall–Lerner condition / non-energy trade / Risk in industry. Risk management / HD61 / Finance / HG1-9999
Sprache: Englisch
Permalink: https://search.fid-benelux.de/Record/base-29402856
Datenquelle: BASE; Originalkatalog
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Link(s) : https://doi.org/10.3390/jrfm15010036

The motivation for this study hinges around the fact that Trinidad and Tobago (T&T) is suffering from the Dutch disease which inadvertently hinders the growth of non-energy exports. This paper examines measures that can be adopted for a small petroleum-exporting economy to dampen the effect of Dutch disease by promoting non-energy trade. This paper is novel and contributes to the literature in using panel data for the T&T case, as it investigates the effect of a devaluation of the TT dollar in order to stimulate non-energy exports (a combination of agriculture and manufacturing trade). Note that previous studies would have examined the Marshall–Lerner condition on the aggregate trade balance which is heavily influenced by energy revenues. The panel autoregressive distributed lag (ARDL) method is used for ten of T&T’s main trading partners for the period 1991 to 2019 to establish findings. The results show that the Marshall–Lerner condition does not hold for aggregate trade in the long run, as expected. However, when non-energy trade is isolated, it is found that a devaluation of the TT dollar does have a positive impact on non-energy trade and the Marshall–Lerner condition holds. Other measures are also recommended to stimulate non-energy exports in the long run.