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Geographical Diversification of Developing Country Exports

  • Shepherd, Ben

This paper shows that export costs, tariffs, and international transport costs are all important determinants of geographical export diversification in a sample of 123 developing countries. A 10% reduction in any one of these factors produces a 5%-6% increase in the number of foreign markets entered. Moreover, there is evidence that these impacts differ significantly across countries and sectors: geographical export diversification is more sensitive to export costs and transport costs in more differentiated sectors, and to export costs in lower income countries. These results are generally robust to alternative specifications, and instrumental variables estimation.

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File URL: http://mpra.ub.uni-muenchen.de/11267/2/MPRA_paper_11267.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11267.

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Date of creation: 24 Oct 2008
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Handle: RePEc:pra:mprapa:11267
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