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The Birth and Growth of New Export Clusters: Which Mechanisms Drive Diversification?

Author

Listed:
  • Dany Bahar

    (Center for International Development at Harvard University)

  • Rodrigo Wagner
  • Ernesto Stein
  • Samuel Rosenow

Abstract

Export diversification is associated with economic growth and development. Our paper explores competing mechanisms that mediate the emergence and growth of export products based on their economic relatedness to pre-existing exports. Our innovation is to simultaneously consider supply factors like labor, sourcing and technology; as well as demand factors like industry specific customer-linkages in a global setting. We find that, while technology and workforce similarity explain emergence and growth, pre-existing downstream industries remain a robust predictor of diversification, especially for jump starting new exports in developing countries. Our global stylized fact generalizes Javorcik’s (2004) view that spillovers are more likely in backward linkages.

Suggested Citation

  • Dany Bahar & Rodrigo Wagner & Ernesto Stein & Samuel Rosenow, 2017. "The Birth and Growth of New Export Clusters: Which Mechanisms Drive Diversification?," CID Working Papers 86a, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:86a
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    File URL: https://growthlab.cid.harvard.edu/files/growthlab/files/clusters_cidrfwp_86.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Onder Nomaler & Bart Verspagen, 2023. "Related or Unrelated Diversification: What is Smart Specialization?," Papers 2303.14458, arXiv.org.
    3. Onder Nomaler & Bart Verspagen, 2022. "Some New Views on Product Space and Related Diversification," Papers 2203.16316, arXiv.org.
    4. Murshed, Muntasir & Dao, Nhung Thi Tuyet, 2020. "Revisiting the EKC hypothesis in South Asia: The role of Export Quality Improvement," MPRA Paper 111620, University Library of Munich, Germany, revised 2020.

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    More about this item

    Keywords

    comparative advantage; exports; relatedness; spillovers; R&D; patents; labor; upstream; downstream;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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