Research Articles On Export Composition and Growth: Evidence from Sri Lanka PRIYANGA DUNUSINGHE Exports affect economic growth through several channels. It is argued that not only the volume of exports but what you export also matters to growth. This article investigates the effect of exports and export composition on the economic growth process in Sri Lanka. Sri Lanka’s exporting sector has performed remarkably, in particular, in the post-liberalization period. During the same period, her former commodity-dependant exporting sector has been transformed into one that largely exports low technology manufactures. Our regression analysis showed that the expansion of the exporting sector has positively and significantly affected gross domestic product (GDP) growth due to higher productivity level in the sector. However, the full benefits of a vibrant exporting sector have not materialized in Sri Lankan context since the externality spillovers of the exporting sector are negli- gible. Further, it showed that export diversification has played an important role in enhancing the growth prospect since it is the manufacturing exporting sector that has higher productivity level than the other sectors. (JEL: F11, F14, O047) Keywords: Economic Growth, Export Composition, Sri Lanka, Trade. 1. Introduction More than four decades have passed since the United Nations General Assembly adopted Resolution 1707, ‘International Trade as the Primary Instrument for Priyanga Dunusinghe, Department of Economics, University of Colombo, PO Box 1490, Colombo 03. Email: dunusinghe@econ.cmb.ac.lk SOUTH ASIA ECONOMIC JOURNAL, 10:2 (2009): 275–304 SAGE Publications Los Angeles  London  New Delhi  Singapore  Washington DC DOI: 10.1177/139156140901000202 Acknowledgements: The author would like to thank Saman Kelegama for encouraging the present work, and comments from an anonymous reviewer are gratefully acknowledged. Usual disclaimers apply.