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Institutions and Export Specialization: Just Direct Effects?

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  • Christian Volpe Martincus
  • Andrés Gallo

Abstract

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.

Suggested Citation

  • Christian Volpe Martincus & Andrés Gallo, 2009. "Institutions and Export Specialization: Just Direct Effects?," Kyklos, Wiley Blackwell, vol. 62(1), pages 129-149, February.
  • Handle: RePEc:bla:kyklos:v:62:y:2009:i:1:p:129-149
    DOI: 10.1111/j.1467-6435.2009.00427.x
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    1. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1091-1126.
    2. Jessie Lin & Insa Flachsbarth & Stephan von Cramon‐Taubadel, 2020. "The role of institutional quality on the performance in the export of coconut products," Agricultural Economics, International Association of Agricultural Economists, vol. 51(2), pages 237-258, March.
    3. Faqin Lin & Ermias O. Weldemicael & Xiaosong Wang, 2017. "Export sophistication increases income in sub-Saharan Africa: evidence from 1981–2000," Empirical Economics, Springer, vol. 52(4), pages 1627-1649, June.
    4. Lin, Jessie & Flachsbarth, Insa & von Cramon-Taubadel, Stephan, 2018. "The role of institutional quality on the performance in the export of coconut products," Department of Agricultural and Rural Development (DARE) Discussion Papers 279174, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).

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