Export Diversification: What's behind the Hump?

By Olivier Cadot, Céline Carrère, Vanessa Strauss-Kahn. Review of Economics and Statistics, 2011

763 citations recorded by the source corpus.

Abstract The paper explores the evolution of export diversification patterns along the economic development path. Using a large database with 156 countries over 19 years at the HS6 level of disaggregation (4,991 product lines), we look for action at the intensive and extensive margins. We find a hump-shaped pattern of export diversification similar to what Imbs and Wacziarg (2003) found for production. Diversification and subsequent reconcentration take place mostly along the extensive margin. This hump-shaped pattern is consistent with the conjecture that countries travel across diversification cones, as discussed in Schott (2003, 2004) and Xiang (2007).

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/989408345bec7d878153970d3976d7c32d44eef3

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Citations in the corpus

Can Developing Countries Gain from Defying Comparative Advantage? Distance to Comparative Advantage, Export Diversification and Sophistication, and the Dynamics of Specialization (2018, methodology): “The Theil index is traditionally used in the empirical trade literature (Cadot et al., 2011; Parteka and Tamberi, 2013) and assesses the concentration of exports in different sectors.”
Economic Diversification in the GCC:Past, Present, and Future (2014, neutral): “The decline in diversification at high income levels involves specialization in high-value-added products (Cadot, Carrere, and Strauss-Kahn 2011; Imbs and Wacziarg 2003).”
Impact of south-south FDI and trade on the export upgrading of African economies (2014, background): “A similar pattern holds for export diversification, with countries at the beginning of their development process diversifying mostly by increasing the number of exported items (extensive margin) and only afterwards by increasing the scale (intensive margin) (Cadot et al. 2011).”
Trouble in the Making?: The Future of Manufacturing-Led Development (2017, background): “As high-income economies became richer, they accumulated capital and improved their production technologies, which shifted the export structure toward more skill- and capital-intensive industries (Carrere et al. 2009).”
Product export diversification and sustainable economic growth in developing countries (2019, background): “More precisely, a country’s export diversification across products can result from the export of new products (diversification at the extensive margin) and from the diversification of exports of existing products, which is reflected in a convergence of the export shares of the goods already exported”
Export upgrading and growth: the prerequisite of domestic embeddedness (2013, background): “In line with the existing literature (Imbs and Wacziarg, 2003; Cadot et al., 2011), the Theil index enters with a negative sign, suggesting that diversification rises with economic growth in China. This coefficient is however insignificant and does not affect that on complexity. In column 4, we add ”