IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/11267.html
   My bibliography  Save this paper

Geographical Diversification of Developing Country Exports

Author

Listed:
  • Shepherd, Ben

Abstract

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.

Suggested Citation

  • Shepherd, Ben, 2008. "Geographical Diversification of Developing Country Exports," MPRA Paper 11267, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:11267
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/11267/2/MPRA_paper_11267.pdf
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    2. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
    3. Christian Broda & David E. Weinstein, 2006. "Globalization and the Gains From Variety," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 541-585.
    4. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    5. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
    6. Bouet, Antoine & Decreux, Yvan & Fontagne, Lionel & Jean, Sebastien & Laborde, David, 2005. "A Consistent Picture of Applied Protection Across the World," Working Papers 18859, TRADEAG - Agricultural Trade Agreements.
    7. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    8. Brenton, Paul & Newfarmer, Richard, 2007. "Watching more than the Discovery channel : export cycles and diversification in development," Policy Research Working Paper Series 4302, The World Bank.
    9. Richard Baldwin & James Harrigan, 2011. "Zeros, Quality, and Space: Trade Theory and Trade Evidence," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 60-88, May.
    10. Olivier Cadot & Céline Carrère & Vanessa Strauss-Kahn, 2011. "Export Diversification: What's behind the Hump?," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 590-605, May.
    11. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2011. "An Anatomy of International Trade: Evidence From French Firms," Econometrica, Econometric Society, vol. 79(5), pages 1453-1498, September.
    12. John Romalis, 2004. "Factor Proportions and the Structure of Commodity Trade," American Economic Review, American Economic Association, vol. 94(1), pages 67-97, March.
    13. Alberto Amurgo-Pacheco, Martha Denisse Pierola, 2007. "Patterns of export diversification in developing countries: intensive and extensive margins," IHEID Working Papers 20-2007, Economics Section, The Graduate Institute of International Studies, revised Jul 2007.
    14. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    15. Peter K. Schott, 2004. "Across-Product Versus Within-Product Specialization in International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 647-678.
    16. Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
    17. Martina Lawless & Karl Whelan, 2014. "Where Do Firms Export, How Much and Why?," The World Economy, Wiley Blackwell, vol. 37(8), pages 1027-1050, August.
    18. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    19. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    20. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    21. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
    22. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    23. Koenig, Pamina, 2009. "Agglomeration and the export decisions of French firms," Journal of Urban Economics, Elsevier, vol. 66(3), pages 186-195, November.
    24. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    25. Patrick Royston & Nicholas J. Cox, 2005. "A multivariable scatterplot smoother," Stata Journal, StataCorp LP, vol. 5(3), pages 405-412, September.
    26. Besedes, Tibor & Prusa, Thomas J., 2011. "The role of extensive and intensive margins and export growth," Journal of Development Economics, Elsevier, vol. 96(2), pages 371-379, November.
    27. John Mullahy, 1997. "Instrumental-Variable Estimation Of Count Data Models: Applications To Models Of Cigarette Smoking Behavior," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 586-593, November.
    28. William C. Brainard & Richard N. Cooper, 1965. "Uncertainty and Diversification in International Trade," Cowles Foundation Discussion Papers 197, Cowles Foundation for Research in Economics, Yale University.
    29. David Hummels & Peter J. Klenow, 2005. "The Variety and Quality of a Nation's Exports," American Economic Review, American Economic Association, vol. 95(3), pages 704-723, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jaime DE MELO & Ben SHEPHERD, 2018. "The Economics of Non-Tariff Measures: A Primer," Working Papers P212, FERDI.
    2. Persson, Maria, 2012. "From trade preferences to trade facilitation: Taking stock of the issues," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 6, pages 1-33.
    3. Aleksandra Parteka, 2013. "The evolving structure of Polish exports (1994−2010) – diversification of products and trade partners," Bank i Kredyt, Narodowy Bank Polski, vol. 44(5), pages 435-466.
    4. repec:eee:inteco:v:151:y:2017:i:c:p:26-47 is not listed on IDEAS
    5. Jerzy Cieślik & Eugene Kaciak & Dianne Welsh, 2012. "The impact of geographic diversification on export performance of small and medium-sized enterprises (SMEs)," Journal of International Entrepreneurship, Springer, vol. 10(1), pages 70-93, March.
    6. repec:bla:afrdev:v:29:y:2017:i:2:p:139-154 is not listed on IDEAS
    7. Maria Cipollina & Federica Demaria & Filomena Pietrovito, 2016. "Determinants of Trade: the Role of Innovation in Presence of Quality Standards," Journal of Industry, Competition and Trade, Springer, vol. 16(4), pages 455-475, December.
    8. Abu Ayob & Shamshubaridah Ramlee & Aisyah Abdul Rahman, 2015. "Financial factors and export behavior of small and medium-sized enterprises in an emerging economy," Journal of International Entrepreneurship, Springer, vol. 13(1), pages 49-66, March.
    9. Marlène Guillon & Jacky Mathonnat, 2018. "What can we learn on Chinese aid allocation motivations from new available data? A sectorial analysis of Chinese aid to African countries," Post-Print hal-01777484, HAL.
    10. Céline CARRERE & Olivier CADOT & Vanessa STRAUSS-KHAN & Madina KUKENOVA, 2009. "OECD Imports: Diversification and quality search," Working Papers 200909, CERDI.
    11. Alessandro Nicita & Valentina Rollo, 2013. "Tariff Preferences As A Determinant For Exports From Sub-Saharan Africa," UNCTAD Blue Series Papers 60, United Nations Conference on Trade and Development.
    12. Ricardo Lopez & Kathleen McQueeney, 2017. "Does Foreign Trade Facilitation Improve Firms’ Export Performance? A Microeconomic Analysis of Chilean Manufacturing Plants," Working Papers 112, Brandeis University, Department of Economics and International Businesss School.
    13. Daniel Saslavsky & Ben Shepherd, 2014. "Facilitating international production networks: The role of trade logistics," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(7), pages 979-999, October.
    14. Hinlo, Jennifer E. & Arranguez, Grace Ivy S., 2017. "Export Geographical Diversification and Economic Growth Among ASEAN Countries," MPRA Paper 81333, University Library of Munich, Germany.
    15. Olivier Cadot & Céline Carrère & Vanessa Strauss-Kahn, 2014. "OECD imports: diversification of suppliers and quality search," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(1), pages 1-24, February.
    16. Bo Xiong & Sixia Chen, 2014. "Estimating gravity equation models in the presence of sample selection and heteroscedasticity," Applied Economics, Taylor & Francis Journals, vol. 46(24), pages 2993-3003, August.
    17. Nicita, Alessandro & Rollo, Valentina, 2015. "Market Access Conditions and Sub-Saharan Africa’s Exports Diversification," World Development, Elsevier, vol. 68(C), pages 254-263.
    18. Kuhlgatz, Christian & Abdulai, Awudu, 2011. "Determinants and Welfare Impacts of Export Crop Cultivation - Empirical Evidence from Ghana," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114692, European Association of Agricultural Economists.
    19. Xuefeng, Qian & Yaşar, Mahmut, 2016. "Export Market Diversification and Firm Productivity: Evidence from a Large Developing Country," World Development, Elsevier, vol. 82(C), pages 28-47.
    20. Ayob, Abu H. & Freixanet, Joan, 2014. "Insights into public export promotion programs in an emerging economy: The case of Malaysian SMEs," Evaluation and Program Planning, Elsevier, vol. 46(C), pages 38-46.
    21. Lavallée, Emmanuelle & Lochard, Julie, 2015. "The comparative effects of independence on trade," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 613-632.

    More about this item

    Keywords

    International trade; Trade policy; Trade and development; Extensive margin; Economic geography;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:11267. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.