Watching more than the Discovery channel : export cycles and diversification in development

By P. Brenton, R. Newfarmer. 2007

149 citations recorded by the source corpus.

This paper examines the export performance of 99 countries over 1995-2004 to understand the relative roles of export growth through"discovery"of new products and growth during post-discovery phases of the export product cycle -- acceleration and maturation -- in existing markets and expansion into new geographic markets. The authors find that expanding existing products in existing markets (growth at the intensive margin) has greater weight in export growth than diversification into new products and new geographic markets (growth at the extensive margin). Moreover, growth into new geographic markets appears to be more important than discovery of new export products in explaining export growth. Of particular importance is whether an exporting country succeeds in reaching more national markets that are already importing the product it makes. This geographic index of market penetration is a powerful explanatory variable of export performance. This suggests that governments should not focus solely or even primarily on the discovery channel, but also seek to identify and address market failures that are constraining exporters in subsequent phases of the export cycle.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/f28ffd904cfa0222520564bfcc3d2840a00f2c0b

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Citations in the corpus

Success and failure of African exporters (2011, unknown): “Following the literature on the intensive and extensive margins (e.g. Evenett and Venables 2003 or Brenton and Newfarmer 2007), we group our primary sample units into new firms, new products (for existing firms), new destinations (for existing firm-products), and continuing firm-productdestinations.”
What Explains the Low Survival Rate of Developing Country Export Flows? (2009, background): “Recent work by Besedes and Prusa (2007), Brenton and Newfarmer (2007) and AmurgoPacheco and Peirola (2007) shows that export growth in developing countries has been driven predominantly by the intensive rather than the extensive margin of trade.”
Trade facilitation and the extensive margin (2013, background): “Cadot et al. (2007) find the same pattern concerning export diversification.”
Product export diversification and sustainable economic growth in developing countries (2019, result): “Quite logically, therefore, the greater contribution of the intensive margin to export growth is confirmed by numerous econometric studies (Evenett and Venables, 2002; Brenton and Newfarmer, 2007; Amurgo-Pachego and Pierola, 2008).”
Export Diversification: What's behind the Hump? (2011, background): “Several papers (for example, Evenett & Venables, 2002; Hummels & Klenow, 2005; Kehoe & Ruhl, 2006; Brenton & Newfarmer, 2007) decompose cross-country export variations into intensive and extensive (new-products or new-markets) margins and study the contribution of these margins in export growth.2…”
Export Diversification and Economic Growth (2008, result): “This stands in contrast to Brenton and Newfarmer (2007) whose results in a panel data setting from 1995-2004 suggest that exporting larger quantities of existing products matter more than exporting a wider set of products.”
Trade Diversification, Income, and Growth: What Do We Know? (2013, unknown): “Brenton and Newfarmer (2007), using SITC data at the 5 digit-level over 99 countries and 20 years, also found that intensive-margin growth accounts for the biggest part of trade growth (80.4%), and that growth at the extensive margin was essentially destination-wise (18%).”