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Export-led growth in Europe: Where and what to export?

  • Paula Gracinda Santos

    ()

    (Faculdade de Economia, University of Porto)

  • Ana Paula Ribeiro

    ()

    (Faculdade de Economia, University of Porto, and CEF.UP – Center for Economics and Finance at UP)

  • Vitor Manuel Carvalho

    ()

    (Faculdade de Economia, University of Porto, and CEF.UP – Center for Economics and Finance at UP)

From the late 70s onwards, the literature has produced numerous studies, mostly for developing countries, relating exports and economic growth. Since several European Union (EU) countries face strong recessions in the sequence of the economic crisis and the related fiscal consolidation measures, exports emerge as a meaningful source of growth for developed countries with rather stagnant domestic markets. In this context, we assess if and how the product and the destination structures of exports shape the growth dynamics for the EU countries. Using panel data estimation to 23 of the 27 EU members over the period 1995-2010, we find that economic growth is foster through export specialization in high value-added products, such as manufactures and high-technology. Moreover, we find evidence that higher growth is fostered by export diversification across partners while enlarging the portfolio of partners, mainly to less developed and more distant countries, has negative impacts on European growth. Unambiguously, relative concentration of exports should be directed towards higher growth countries.

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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 479.

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Length: 30 pages
Date of creation: Jan 2013
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Handle: RePEc:por:fepwps:479
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