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Openness, similarity in export composition, and income dynamics

Author

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  • Luca De Benedictis
  • Lucia Tajoli

Abstract

A relevant share of the theoretical and empirical analysis on economic growth has been devoted to finding a specific role for international trade in reinforcing countries' growth rates. Not as much attention has been dedicated to the role of sectoral composition of export in influencing the effect of trade on income convergence. In this paper we look at this issue along the line of research on multiple regimes and convergence clubs, considering how openness and similarity in export composition among countries can induce convergence in income levels among the same countries. We apply our analysis to the catching-up of income levels of Central and Eastern Europe Countries to the EU benchmark. We explicitly consider the sectoral export patterns of the CEECs by comparing them to those of the 15 old members of the EU, focusing on countries' specialization as suppliers for the EU market. Our main result is that similarity in export composition has a positive, significant and nonlinear impact on catching-up. Results are robust to controlling for openness and country-size and for investment, schooling, and the quality of institutions.

Suggested Citation

  • Luca De Benedictis & Lucia Tajoli, 2007. "Openness, similarity in export composition, and income dynamics," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(1), pages 93-116.
  • Handle: RePEc:taf:jitecd:v:16:y:2007:i:1:p:93-116
    DOI: 10.1080/09638190601165798
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    Citations

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    Cited by:

    1. Valeria Costantini & Francesco Crespi, 2015. "European enlargement policy, technological capabilities and sectoral export dynamics," The Journal of Technology Transfer, Springer, vol. 40(1), pages 25-69, February.
    2. Kaitila, Ville, 2010. "Quality-adjusted similarity of EU-countriesŽ export structure," Discussion Papers 1227, The Research Institute of the Finnish Economy.
    3. Alessandro Antimiani & Anna Carbone & Valeria Costantini & Roberto Henke, 2011. "Agri-food exports and the enlarged european union," Departmental Working Papers of Economics - University 'Roma Tre' 0134, Department of Economics - University Roma Tre.
    4. Sperlich, Y., 2013. "Comparing the Speed of Convergence in American Integration Areas," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 77-88.

    More about this item

    Keywords

    CEECs; transition; growth; semiparametrics;

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