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Export sophistication increases income in sub-Saharan Africa: evidence from 1981–2000

Author

Listed:
  • Faqin Lin

    (Central University of Finance and Economics (CUFE))

  • Ermias O. Weldemicael

    (The University of Melbourne)

  • Xiaosong Wang

    (Renmin University of China)

Abstract

Previous studies on export diversification show that sub-Saharan African countries are at the lowest end in export diversification in the world. Recent literature also indicates the importance of export sophistication on economic development. This raises an important question whether export sophistication contributes to the income improvement in sub-Saharan African. The paper examines the causal effect of export sophistication on income in sub-Saharan Africa with panel data. By employing instrumental variables techniques and heteroskedasticity identification strategy that correct for endogeneity bias, the findings show that within-country variations in export sophistication lead to income growth. That is, a 1 % point increase in the export sophistication index is associated with an increase in GDP per capita of approximately 0.08 % points in the long run.

Suggested Citation

  • 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.
  • Handle: RePEc:spr:empeco:v:52:y:2017:i:4:d:10.1007_s00181-016-1103-7
    DOI: 10.1007/s00181-016-1103-7
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    Cited by:

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    2. Naima Chrid & Sami Saafi & Mohamed Chakroun, 2021. "Export Upgrading and Economic Growth: a Panel Cointegration and Causality Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 811-841, June.
    3. Digvijay S. Negi & Bharat Ramaswami, 2020. "International risk sharing for food staples," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2020-002, Indira Gandhi Institute of Development Research, Mumbai, India.
    4. Evžen Kočenda & Karen Poghosyan, 2018. "Export Sophistication: A Dynamic Panel Data Approach," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(12), pages 2799-2814, September.
    5. Evzen Kocenda & Karen Poghosyan, 2017. "Export sophistication: A dynamic panel data approach," Working Papers 980, Central Bank of the Republic of Armenia.
    6. Digvijay S. Negi & Pratap S. Birthal & Devesh Roy & Jaweriah Hazrana, 2020. "Market access, price policy and diversification in Indian agriculture," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2020-009, Indira Gandhi Institute of Development Research, Mumbai, India.

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    More about this item

    Keywords

    Export sophistication; GDP per capita; Sub-Saharan African;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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