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Decomposing World Export Growth and the Relevance of New Destinations

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  • Andres Zahler

Abstract

Looking to understand what drives countries' export growth in practice, I provide a decomposition of world export growth at the product variety level between new destinations, new products, and growth in value of old varieties. New destinations play a significant role, accounting for 37 percent of the growth in developing countries. By comparison, entry into new product categories - a margin that has received considerable attention - explains just 7 percent of export growth. Exploring the nature of destination expansion reveals it is neither automatic nor permanent. Even relatievly competitive sectors face difficulties penetrating new destinations, and these difficulties are negatively correlated with population size and GDP per capita. Consistent with pervasive experimentation and failure, more than a third of all products in new destinations exported only once to a destination in the sixteen years studied.

Suggested Citation

  • Andres Zahler, 2007. "Decomposing World Export Growth and the Relevance of New Destinations," CID Working Papers 20, Center for International Development at Harvard University.
  • Handle: RePEc:cid:wpfacu:20
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    References listed on IDEAS

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    Cited by:

    1. Wagner, Rodrigo & Zahler, Andrés, 2015. "New exports from emerging markets: Do followers benefit from pioneers?," Journal of Development Economics, Elsevier, vol. 114(C), pages 203-223.
    2. Bahar, Dany & Hausmann, Ricardo & Hidalgo, Cesar A., 2014. "Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion?," Journal of International Economics, Elsevier, vol. 92(1), pages 111-123.
    3. Türkcan, Kemal, 2014. "Exports Margins in Austria’s Export Growth," MPRA Paper 53085, University Library of Munich, Germany.

    More about this item

    Keywords

    international trade; export growth; destinations; export growth decomposition;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F19 - International Economics - - Trade - - - Other

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