Determinants of Export Diversification Around the World: 1962-2000

By Manuel Agosin, R. Alvarez, Claudio Bravo-Ortega. 2012

329 citations recorded by the source corpus.

Using a large dataset of countries during the last forty years, this paper analyzes the main determinants of export diversification. We explore the role of several factors and we use three different indicators of export diversification. We find robust evidence across specifications and indicators that trade openness induces higher specialization and does not favor export diversification. In contrast, financial development helps countries to diversify their exports. Looking at the effects of exchange rates, our results suggest a negative effect of real exchange rate overvaluation, but not significant effects of exchange rate volatility. We also find evidence that capital accumulation contributes positively to diversity exports and that increasing remoteness tend to reduce export diversification. We explore also the role of terms of trade shocks. Some of our results suggest that there is an interesting interaction between this variable and human capital. We find that improvements in terms of trade tend to concentrate exports, but this effect is lower for those countries with higher levels of human capital. This evidence suggests that countries with higher education can take advantage of positive terms of trade shocks to increase export diversification.

Subfields: Development, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/f342b287dfd4d563e35493aabf718cc11d0c29d2

How researchers see this paper

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In Development

1. P. Lectard
2. Ogechi Adeola
3. Eric Rougier
4. O. Evans

In Economics and Econometrics

1. Ogechi Adeola
2. O. Evans
3. P. Lectard
4. Eric Rougier

In Strategy and Management

1. P. Lectard
2. Ogechi Adeola
3. Eric Rougier
4. O. Evans

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): “country size and location and degree of trade openness – on export diversification (Agosin et al., 2012; Parteka and Tamberi, 2013a; Mau 2016) and export sophistication (Weldemicael, 2012; Zhu and Fu, 2013), but could not identify significant policy determinants(1).”
• Financial inclusion, financial development, and economic diversification in Nigeria (2017, methodology): “Agosin et al. suggested that countries with more highly educated populations can take advantage of positive terms of trade shocks to boost diversification. Using the fully modified ordinary least squares selected ASEAN and SAARC countries for the period 1986 to 2012, Noureen, Mahmood, and Sector (20”