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Export-oriented industrialization

Definition

Export-oriented industrialization is a trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage.

Analogy

Imagine you're really good at making lemonade, but not so great at baking cookies. Instead of trying to do both, you focus on making and selling lots of lemonade (what you're best at) to your neighbors. That's what countries do with export-oriented industrialization - they focus on producing and exporting what they're best at.

Related terms

Comparative Advantage: The ability of an individual or group to carry out a particular economic activity more efficiently than another activity.

Trade Liberalization: The removal or reduction of restrictions or barriers on the free exchange of goods between nations.

Import Substitution Industrialization (ISI): An economic policy that advocates replacing foreign imports with domestic production. It contrasts with export-oriented industrialization as it focuses inward rather than outward.