Structural Transformation of Exports in a Product Space Model
AbstractThe research paper deals with an export structural transformation model providing for a transition from the production and exports of goods with low value added to the production and exports of goods with high value added. It is essential for the improvement of a nation's welfare, as observations show that in a longer perspective the level of economic development is related to the degree of export sophistication. The speed of structural transformation depends on the distance in the product space between the potential export goods and the existing export goods with revealed comparative advantage. Estimations within the research suggest that the relative distance of Latvian export goods to goods with comparative advantage is rather small. Potential of almost all groups of currently produced goods to act as drivers of development has already been exhausted to a large extent. In order to enhance sophistication of Latvia's export structure, the production of goods with their implicit income level exceeding the current average weighted value of the export basket should be augmented. Potential goods for exports include pharmaceutical products, medical, precision and optical instruments as well as chemicals and chemical products. However, it is rather unlikely that comparative advantage in these products can be developed without extra supportive measures taken by the Government.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Latvijas Banka in its series Working Papers with number 2008/04.
Date of creation: 10 May 2008
Date of revision:
structural transformation; comparative advantage; export sophistication;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F19 - International Economics - - Trade - - - Other
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-22 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jaffe, Adam B, 1986.
"Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value,"
American Economic Review,
American Economic Association, vol. 76(5), pages 984-1001, December.
- Adam B. Jaffe, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value," NBER Working Papers 1815, National Bureau of Economic Research, Inc.
- Grossman, Gene M. & Helpman, Elhanan, 1989.
"Product Development and International Trade,"
3445094, Harvard University Department of Economics.
- Grossman, G.M. & Helpman, E., 1988. "Product Development And International Trade," Papers 132, Princeton, Woodrow Wilson School - Public and International Affairs.
- Gene M. Grossman & Elhanan Helpman, 1990. "Product Development and International Trade," NBER Working Papers 2540, National Bureau of Economic Research, Inc.
- Ricardo Hausmann & Dani Rodrik, 2002.
"Economic Development as Self-Discovery,"
NBER Working Papers
8952, National Bureau of Economic Research, Inc.
- Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self Discovery," CEPR Discussion Papers 3356, C.E.P.R. Discussion Papers.
- Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self-Discovery," Working Paper Series rwp02-023, Harvard University, John F. Kennedy School of Government.
- Hausmann, Ricardo & Hwang, Jason & Rodrik, Dani, 2006.
"What You Export Matters,"
CEPR Discussion Papers
5444, C.E.P.R. Discussion Papers.
- Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2005. "What You Export Matters," NBER Working Papers 11905, National Bureau of Economic Research, Inc.
- Hausmann, Ricardo & Hwang, Jason & Rodrik, Dani, 2005. "What You Export Matters," Working Paper Series rwp05-063, Harvard University, John F. Kennedy School of Government.
- Douglas W. Diamond, 1998.
"Reputation Acquisition in Debt Markets,"
Levine's Working Paper Archive
602, David K. Levine.
- Hausmann, Ricardo & Klinger, Bailey, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," Working Paper Series rwp06-041, Harvard University, John F. Kennedy School of Government.
- Artemyeva, E. & Balandina, M. & Vorobyev, P. & Kadochnikov, S. & Konovalova, M. & Nikitina, O. & Ostanin, I., 2010. "Basket of Growth: New Export Industries in Sverdlovsk Region," Journal of the New Economic Association, New Economic Association, issue 6, pages 62-81.
- Trond-Arne Borgersen & Roswitha M. King, 2011. "Inflation in Latvia," Eastern European Economics, M.E. Sharpe, Inc., vol. 49(3), pages 26-53, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ivars Tillers).
If references are entirely missing, you can add them using this form.