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Want Export Diversification? Educate The Kids First

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  • Michael Jetter
  • Andrés Ramírez Hassan

Abstract

type="main" xml:id="ecin12213-abs-0001"> This paper uses Bayesian model averaging to uncover the true determinants of export diversification among 36 potential factors, and thus 2-super-36 potential models. Using data from 2001 to 2010, our results reveal two strong predictors: Primary school enrollment (99.7% posterior inclusion probability in the true model) raises export diversification, whereas the share of natural resources in gross domestic product (98.6%) lowers diversification levels. The importance of basic education coverage offers policymakers an opening toward diversifying exports, at least in the long run. This result is robust to accounting for the endogeneity of income levels by applying an instrumental variable BMA method. ( JEL C11, F1, F34, O1, O2, O11)

Suggested Citation

  • Michael Jetter & Andrés Ramírez Hassan, 2015. "Want Export Diversification? Educate The Kids First," Economic Inquiry, Western Economic Association International, vol. 53(4), pages 1765-1782, October.
    • Handle: RePEc:bla:ecinqu:v:53:y:2015:i:4:p:1765-1782
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    8. Zarach, Zuzanna Helena & Parteka, Aleksandra, 2023. "Export diversification and dependence on natural resources," Economic Modelling, Elsevier, vol. 126(C).
    9. Jetter, Michael & Parmeter, Christopher F., 2018. "Sorting through global corruption determinants: Institutions and education matter – Not culture," World Development, Elsevier, vol. 109(C), pages 279-294.
    10. Mark F. J. Steel, 2020. "Model Averaging and Its Use in Economics," Journal of Economic Literature, American Economic Association, vol. 58(3), pages 644-719, September.
    11. Sajad Rahimian, 2021. "The Determinants of Democracy Revisited: An Instrumental Variable Bayesian Model Averaging Approach," Papers 2103.04255, arXiv.org.
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    More about this item

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • F1 - International Economics - - Trade
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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