Productivity Differential and the Relationship between Exports and GDP in Fiji: An Empirical Assessment Using the Two Sector Model

ABSTRACT

This study uses a two-sector model to determine the productivity differential between the export and non-export sectors of Fiji, and the contribution of exports and investment to gross domestic product over the period 1962–2000. Amongst our key results, we find that the productivity differential between the export and non-export sectors is small and statistically insignificant; investment to GDP ratio and weighted exports positively contribute to economic growth in Fiji; and in the abnormal years (years of coups in Fiji) marginal productivity in capital in the non-export sector is lower than in normal years.

KEY WORDS:

• Exports
• Fiji
• productivity
• GDP
• developing countries