Determinants of Export Diversification Around the World: 1962–2000
AbstractUsing a large dataset of countries during the last forty years, this paper analyzes the main determinants of export diversification. We explore the role of several factors and we use three different indicators of export diversification. We find robust evidence across specifications and indicators that trade openness induces higher specialization and does not favor export diversification. In contrast, financial development helps countries to diversify their exports. Looking at the effects of exchange rates, our results suggest a negative effect of real exchange rate overvaluation, but not significant effects of exchange rate volatility. We also find evidence that capital accumulation contributes positively to diversity exports and that increasing remoteness tend to reduce export diversification. We explore also the role of terms of trade shocks. Some of our results suggest that there is an interesting interaction between this variable and human capital. We find that improvements in terms of trade tend to concentrate exports, but this effect is lower for those countries with higher levels of human capital. This evidence suggests that countries with higher education can take advantage of positive terms of trade shocks to increase export diversification.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal The World Economy.
Volume (Year): 35 (2012)
Issue (Month): 3 (03)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920
Other versions of this item:
- Manuel Agosin & Roberto Álvarez & Claudio Bravo-Ortega & Esteban Puentes, 2010. "Determinants of exports diversifications around the world: 1962 - 2000," Working Papers wp309, University of Chile, Department of Economics.
- Manuel R. Agosin & Roberto Alvarez & Claudio Bravo-Ortega, 2011. "Determinants of Export Diversificationaround the World: 1962 - 2000," Working Papers Central Bank of Chile 605, Central Bank of Chile.
- F10 - International Economics - - Trade - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
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