TRADE LIBERALIZATION AND THE MANUFACTURING SECTOR: THE CASE OF THE SMALL DEVELOPING COUNTRY |
| |
| Authors: | Denny Lewis-Bynoe Jennifer Griffith Winston Moore |
| |
| Institution: | Lewis-Bynoe:;Senior Economist, Research Department, Central Bank of Barbados, P.O. Box 1016, Bridgetown, Barbados. E-mail Griffith:;Economist, Research Department, Central Bank of Barbados, P.O. Box 1016, Bridgetown, Barbados. E-mail Moore:;Economist, Research Department, Central Bank of Barbados, P.O. Box 1016, Bridgetown, Barbados. E-mail |
| |
| Abstract: | Historically, the lack of competition in developing countries has resulted in highly concentrated domestic industries that suffer from diseconomies of scale but prosper behind high walls of protection. Liberalization is expected to reverse this trend but at what cost? This article utilizes an import demand framework to examine the potential impact of trade liberalization on the manufacturing sector in the Caribbean using the case of Barbados. The results indicate that the manufacturing industry could encounter tremendous price competition, which could compromise the future survival of these industries. The study recommends that industries reorganize production processes to increase efficiency, which will allow them to compete effectively in the new global trading environment. These results may also be applicable to the wider Caribbean. |
| |
| Keywords: | |
|
|
