Determinants of Export Diversificationaround the World: 1962 - 2000
AbstractUsing a large dataset of countries, covering the period 1962-2000, this paper analyzes the main determinants of export diversification (concentration). We explore the role of several factors and we use three different indicators of export concentration. We find robust evidence across specifications and indicators that trade openness induces higher specialization. In contrast, financial development does not seem to help countries to diversify their exports. Looking at the effects of exchange rates, in some of our results we find a positive effect of real exchange rate volatility on concentration, but not significant effects of exchange rate overvaluation. We also find evidence that human capital accumulation contributes positively to diversify exports and that increasing remoteness tends to reduce export diversification. We also explore the role of terms-of-trade shocks. Most of our results suggest an interesting interaction between this variable and human capital: improvements in the 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 InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 605.
Date of creation: Jan 2011
Date of revision:
Other versions of this item:
- Manuel R. Agosin & Roberto Alvarez & Claudio Bravo‐Ortega, 2012. "Determinants of Export Diversification Around the World: 1962–2000," The World Economy, Wiley Blackwell, vol. 35(3), pages 295-315, 03.
- 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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