Export performance during economic transition in Mongolia

Whilst there is a consensus among economists that export-oriented development strategy is superior to inward-oriented strategy, doubts whether export-orientation can solve the problems of developing countries remain very strong. The purpose of this paper is to contribute to this debate using the experience of Mongolia-the country, which was little known to the rest of the world until the early 1990s. Results suggest a significant rise in export intensity following the adoption of export-oriented strategy. There is strong statistical evidence to suggest that foreign investment and lower unit labor cost have positively contributed to export expansion in Mongolian manufacturing. Our findings also indicate that industry protection and the state ownership retard export performance suggesting further liberalization in trade and investment policy, and privatization of state-owned enterprises to improve export competitiveness.