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Overall Specialization and Income: Countries Diversity

  • Luca De Benedictis

    (Università di Macerata)

  • Marco Gallegati

    (Università Politecnica delle Marche)

  • Massimo Tamberi

    (Università Politecnica delle Marche)

� � � This paper gives evidence to a stylized fact often disregarded in international trade empir- ics: countries' diversification. In the last fifteen years, the growth of world trade coexisted with the tendency of countries to reduce the specialization of their export composition along the development path. On average, countries do not specialize, they diversify. Our semiparametric empirical analysis shows how this result is robust to the use of different statistical indexes used to measure trade specialization to the level of sectoral aggrega- tion and to the level of smoothing in the nonparametric term associated to income per capita. Using a General Additive Model (GAM) with country-specific fixed-effect, we show that, controlling for countries heterogeneity, sectoral export diversification increases with income. �

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Paper provided by Macerata University, Department of Finance and Economic Sciences in its series Working Papers with number 37-2006.

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Length: 29
Date of creation: Oct 2006
Date of revision: Oct 2008
Publication status: Forthcoming in The Review of World Economics, 1, 2009
Handle: RePEc:mcr:wpdief:wpaper00037
Contact details of provider: Postal: Via Crescimbeni, 20 -62100 Macerata
Phone: 0733.258.201
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  3. Nancy L Stokey, 1986. "Learning-by-Doing and the Introduction of New Goods," Discussion Papers 699, Northwestern University, Center for Mathematical Studies in Economics and Management Science, revised May 1987.
  4. Luca De Benedictis & Marco Gallegati & Massimo Tamberi, 2007. "Semiparametric analysis of the specialization-income relationship," Applied Economics Letters, Taylor & Francis Journals, vol. 15(4), pages 301-306.
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  8. Sørensen, Bent E & Yosha, Oved, 1999. "Risk Sharing and Industrial Specialization: Regional and International Evidence," CEPR Discussion Papers 2295, C.E.P.R. Discussion Papers.
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  13. Redding, Stephen, 2002. "Specialization dynamics," Journal of International Economics, Elsevier, vol. 58(2), pages 299-334, December.
  14. Miklos Koren & Silvana Tenreyro, 2003. "Diversification and development," Working Papers 03-3, Federal Reserve Bank of Boston.
  15. Robert C. Feenstra & Andrew K. Rose, 2000. "Putting Things In Order: Trade Dynamics And Product Cycles," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 369-382, August.
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  17. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
  18. Christian Broda & David W. Weinstein, 2004. "Variety Growth and World Welfare," American Economic Review, American Economic Association, vol. 94(2), pages 139-144, May.
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