Subsidising Textile Industries and Macroeconomic Performance in DevelopingCountries: An Application to the Cameroonian Economy

Abstract

Rodrigue Nobosse Tchoffo, Ibrahim Ngouhouo and Guivis Zeufack Nkemgha

The most common researches on subsidies focus on the exports side. This policy is usual in the most developed countries and constitutes a mean for the government to accompany the industries. Concerning the textile sector, the developing countries are more often dependent while they have a high capacity to produce it themselves. Therefore, the objective of this article is to investigate the economic impacts of textile subsidy in developing countries. This is done through a computable general equilibrium (CGE) analysis applied to the Cameroonian economic. We show that by subsidizing the textile sector, the government participates not only to increase the capacity of firms to offer this good, but also the policy is favourable to the economic growth of these developing countries.

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