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Is South–South Trade A Testing Ground For Structural Transformation?


  • Bailey Klinger


The purpose of this paper is to analyse the composition of South–South as opposed to South– North trade in recent years, applying emerging methodologies and highly disaggregated trade data to consider whether the South as a market provides developing countries with greater opportunities to transform their productive structures and move to more sophisticated export sectors than the Northern market does. The results show that for a group of developing countries, primarily in Africa, Latin America and Central Asia, exports within the South are more sophisticated and better connected in the product space than exports to the North, whereas the opposite is true for the faster-growing economies of Asia and Eastern Europe (excluding the Commonwealth of Independent States). It is shown that the primary source of cross-country variation in export sophistication and connectedness is between Northbound rather than Southbound export baskets. And yet it is clear that for a large group of developing countries, current export flows to the North are not particularly growth-enhancing, nor do they offer learning opportunities to fuel structural transformation, and for these countries South–South trade flows may indeed be a testing ground for structural transformation. This paper focuses on clearly establishing the facts about export composition by market, and identifying promising avenues for further investigation.

Suggested Citation

  • Bailey Klinger, 2009. "Is South–South Trade A Testing Ground For Structural Transformation?," UNCTAD Blue Series Papers 40, United Nations Conference on Trade and Development.
  • Handle: RePEc:unc:blupap:40

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    References listed on IDEAS

    1. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
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    4. Hausmann, Ricardo & Klinger, Bailey, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," Working Paper Series rwp06-041, Harvard University, John F. Kennedy School of Government.
    5. Nancy L. Stokey, 1991. "The Volume and Composition of Trade Between Rich and Poor Countries," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 63-80.
    6. Beers, C.P., 1991. "Trade between developing countries and its importance for economic development," Serie Research Memoranda 0113, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    7. M. A. Mcpherson & M. R. Redfearn & M. A. Tieslau, 2000. "A Re-Examination of the Linder Hypothesis: A Random-Effects Tobit Approach," International Economic Journal, Taylor & Francis Journals, vol. 14(3), pages 123-136.
    8. Juan Carlos Hallak, 2010. "A Product-Quality View of the Linder Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 453-466, August.
    9. Amsden, Alice H, 1976. "Trade in Manufactures between Developing Countries," Economic Journal, Royal Economic Society, vol. 86(344), pages 778-790, December.
    10. Amsden, Alice H., 1986. "The direction of trade -- past and present -- and the learning effects of exports to different directions," Journal of Development Economics, Elsevier, vol. 23(2), pages 249-274, October.
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    12. Michael McPherson & Michael Redfearn & Margie Tieslau, 2001. "International trade and developing countries: an empirical investigation of the Linder hypothesis," Applied Economics, Taylor & Francis Journals, vol. 33(5), pages 649-657.
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    Cited by:

    1. Nicole Alice Sindzingre, 2011. "The Rise of China in Sub-Saharan Africa: its Ambiguous Economic Impacts," Post-Print halshs-00636022, HAL.
    2. Amighini, Alessia & Sanfilippo, Marco, 2014. "Impact of South–South FDI and Trade on the Export Upgrading of African Economies," World Development, Elsevier, vol. 64(C), pages 1-17.
    3. Lee Robinson & Alice Nicole Sindzingre, 2012. "China’s Ambiguous Impacts on Commodity-Dependent Countries: the Example of Sub-Saharan Africa (with a Focus on Zambia)," EconomiX Working Papers 2012-39, University of Paris Nanterre, EconomiX.

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