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Institutions and Export Specialization: Just Direct Effects?

  • Christian Volpe Martincus
  • Andrés Gallo

Many developing countries' exports tend to be highly concentrated in terms of sectors and even products. In particular, they are strongly specialized in self-contained sectors. Recent economic literature has shown that institutions contribute to explaining this pattern. In this paper, we argue that the degree of self-containment itself is endogenous to institutions. Ceteris paribus a given sector will therefore have different levels of interactions with the rest of the economy across countries depending on the quality of institutions. We provide supportive evidence using a simultaneous equation approach on data on sectoral trade, country-specific input-output linkages, and institutional strength. Copyright 2009 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Kyklos.

Volume (Year): 62 (2009)
Issue (Month): 1 (02)
Pages: 129-149

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Handle: RePEc:bla:kyklos:v:62:y:2009:i:1:p:129-149
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