Poverty and export product diversification in developing countries

Abstract

The current article contributes to the literature on the relationship between poverty and international trade by addressing an issue that has received scant attention in this literature, that is, the effect of poverty on export product diversification in developing countries. The analysis focuses on a sample of 109 developing countries covering the period 1980–2014. It shows that over this sample, poverty influences positively export product concentration, with the magnitude of this effect increasing as countries experience higher development level. Furthermore, the analysis reveals that the effect of poverty on export product concentration depends on a number of factors, including the amount of development aid flows that accrue to a country, the accumulated human capital, the depth of financial development as well as the amount of public revenue available to the government.