Working Paper: CEPR ID: DP6590
Authors: Olivier Cadot; Cline Carrère; Vanessa Strauss-Kahn
Abstract: The paper explores the evolution of export diversification patterns along the economic development path. Using a large database with 159 countries over 17 years at the HS6 level of disaggregation (4?998 product lines) we look for action at the ?intensive? and ?extensive? margins (diversification of export values among active product lines and by addition of new product lines respectively) using various export concentration indices and the number of active export lines. We also look at new product introduction as an indicator of ?export-entrepreneurship?. We find a hump-shaped pattern of export diversification similar to what Imbs and Wacziarg (2003) found for production and employment. Low and Middle income countries diversify mostly along the extensive margin whereas high income countries diversify along the intensive margin and ultimately re-concentrate their exports towards fewer products. Such hump-shaped pattern is consistent with the conjecture that countries travel across diversification cones as discussed in Schott (2003, 2004) and Xiang (2007).
Keywords: export diversification; international trade; Latin America
JEL Codes: F1; O11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GDP per capita (O49) | export diversification (F29) |
| economic development (O29) | export diversification (F29) |
| share of raw materials in exports (Q37) | export concentration (D30) |
| public infrastructure (H54) | export diversification (intensive margin) (F29) |