Determinants Of Export Diversification Research Articles

Determinants of Export Diversification: The Case of Russian Regions

ABSTRACT The hydrocarbon sector accounts for 50% of Russian exports, leading to high commodity price volatility risks for the economy. Prior literature emphasizes the role of export diversification in development and in hedging external shocks. We investigate factors affecting regional export diversification, applying method of moments quantile regression. We devise two export diversification measures, using Theil and Herfindahl indices. Our empirical findings demonstrate that innovations spur export diversification in industrial regions, while small and medium enterprises diversify exports in industrial and non-resource regions. Natural resource extraction enforces regional exports concentration. We develop policy implications for Russian regional policymakers considering the specialization of regional economies.

Determinants of Export Diversification: Evidence from Fractional Logit Estimation Model

This article empirically explores the key drivers of export diversification in a large panel of 101 countries consisting of 43 high-income, 47 middle-income, and 11 low-income countries from 1995 to 2019. Considering the fractional nature of the dependent variable (Herfindahl-Hirschman Index), the estimates are obtained using the fractional logit technique with a set of potential determinants of export diversification for all country samples and three sub-samples. The results reveal that human capital accumulation, GDP per capita, population, trade openness, the share of manufactured output to GDP, and FDI are important determinants of export diversification. However, the share of agriculture to GDP and official exchange rate promotes export concentration. Contrary to our all-country estimation, GDP per capita and population act as deterrents to export diversification in low-income countries. In addition, the results show that the value-added in agriculture plays a dominant role in strengthening the export structure of high-income countries. Our findings suggest that policymakers should implement and reform policies targeting human capital accumulation, trade openness, investment, and value addition in the manufacturing sector for diversifying the export structure. JEL Codes: C33, F14, J24, O1

Отсутствие выхода к морю, прямые иностранные инвестиции и диверсификация экспорта

This paper contributes to the literature on the determinants of export diversification in developing countries by addressing the landlockedness issue and foreign direct investment. Although there are some papers analyzing the impact of foreign direct investment on export diversification, the specific focus of the geographical disadvantage, being landlocked, is largely overlooked. The empirical analysis focuses on a sample of 92 developing countries covering the period 19962018. The result of the system GMM estimation indicates that the landlocked status influences negatively export product diversification for the sample. Furthermore, the result of the interaction term indicates that the landlocked status worsens the positive effectiveness of FDI in the diversification process for developing countries.

Determinants of Export Diversification in Developing Countries

This study unravels the impact of different determinants of export diversification in 62 developing countries classified as low, middle, and high-income over the period 2010-2018. The empirical strategy based on Poisson Pseudo-Maximum Likelihood revealed that GDP promotes the diversification of export in low, middle, and all countries’ samples and reduces it in high-income countries. Human capital reduces export diversification in low and middle-income countries and increases it in high-income and all countries’ samples. Population and countries’ competitiveness are associated with increased export diversification. Additionally, innovation does not affect diversification in all the country classifications while R&D significantly promotes diversification in middle-income and reduces it in low-income and all countries sample. The mediation effects of the variables are positive in the middle-income and high-income countries and mixed effect in low-income and all countries sample. The study, therefore recommends the need to develop human capital, increase global competitiveness, optimal use of resources for R&D to further increase export diversification in developing countries.

Internalization of externalities in international trade

Using disaggregated customs data about exporters from nine countries, I demonstrate that informational externalities are determinants of entry, survival, and growth of exporters at the product–destination market level. I show that exporters who optimize entry decisions and internalize informational externalities survive longer and grow faster. Then, I conceptualize why exporters enter certain international markets and why not all exporters from the same origin survive and grow in these markets. I incorporate the interaction between the performance and number of peers in a given market to identify a potential learning externality that exporters may be exposed to. Also, I highlight that, even without the formation of formal networks, the observation of the actions of peers in export markets can deliver implications for export flows: exporters may not need to start small in new markets if the actions of peers in those markets reveal enough information. By helping to explain how export relationships survive and grow, I complement the literature on the determinants of export diversification and signal to export promotion agencies the importance of internalization of informational externalities by exporters.

Dynamics and determinants of export diversification in Brazil from 2003 to 2013

Abstract Brazil was successful in diversifying its export package from the 1960s to the beginning of the twenty-first century. However, this performance has been more ambiguous over the last decade. This study explores the literature on the impact of export diversification on economic growth and the determinants of successful diversification. More specifically, it analyzes the dynamics of Brazilian export diversification between 2003 and 2013. The results suggest that, overall, exports momentarily concentrated in 2004, 2008 and 2012, but rejoiced from a diversification spike in 2005. Southern and Southeastern states are found to have more diversified exports, but Central-West and Northeastern states have experienced higher diversification rates since 2006. Via a dynamic panel data analysis, using System General Methods of Moments estimation method, including all Brazilian states, past diversification performances, education, patents per capita, credits and public investments are found to be significant determinants of Brazilian export diversification.

Determinants of Export Diversification: Bayesian approach

La diversificación exportadora brinda a las economías diversos beneficios como el fomento y estabilización del crecimiento económico mediante la reducción de la volatilidad de los ingresos por las exportaciones y el incremento de la productividad a través de externalidades positivas a nivel intra e inter sectorial. En este sentido, es relevante poder identificar qué posibilita la diversificación de las exportaciones; no obstante, ante un marco teórico disperso, esta identificación se convierte en una ardua tarea. Este documento mediante la metodología Bayesian Moving Average intenta descubrir qué factores idiosincráticos de cada país son relevantes para explicar una mayor diversificación exportadora en el largo plazo. Los resultados sugieren que seis elementos son los más importantes para la predicción de la diversificación de las exportaciones. Estos elementos son: i) renta de recursos naturales, ii) población, iii) formación bruta de capital (stock de capital), iv) enseñanza secundaria, v) crédito al sector privado y vi) capital humano. Estos resultados están en línea con los resultados obtenidos en la literatura.

The Roots of Export Diversification

Countries with diversi ed export baskets take advantage of various bene ts, which are said to foster and stabilize economic growth directly and through indirect channels (e.g. reduced income volatility, positive externalities, spillover e ects). This is especially important in the context of developing economies. However, identifying the true determinants of export diversifi cation is di cult as there exists no comprehensive theoretical or empirical framework to capture all potential factors in their entirety. This paper uses Bayesian Model Averaging to uncover the true long-term roots of export diversi cation among 43 potential determinants,and thus 2 potential models. Our results suggest that only four factors are important in predicting export diversi cation levels over the long run: natural resource rents as a percentage of GDP (100 % posterior inclusion probability), primary school enrollment rates (96 %), population size (25 %), and foreign direct investment levels (17 %). Many prominent candidates turn out to be insigni cant in determining diversi cation levels. Neither policy-related variables (e.g. tari s, freedom from trade regulations or democracy) nor macroeconomic factors (such as trade openness, terms of trade or domestic investment levels) nor geographical remoteness (whether the country is an island or landlocked) play a role. Various robustness checks con rm our results.

Determinants of Export Diversification and Sophistication in Sub-Saharan Africa

This paper studies the political and economic factors that determine successful export diversification (ED) and export sophistication (ES) strategies in the Sub-Saharan African (SSA) countries and also the way in which successful ED and sophistication strategies contribute to explain the improving in some of the millennium development goals (MDG). We run separate regressions for the determinants of ES and ED, using disaggregated data of the 48 SSA countries, from 1960 to 2005. The results suggest that better governance is an important determinant for the success of diversification and sophistication strategies in SSA. In particular the level of corruption, transparency and accountability are important factors in limiting or promoting the scope of diversification and the level of sophistication of the exports. The results also suggest that increases in human capital in SSA countries promote both ED and ES, showing that the level of education of the workforce is positively related with ES and ED, with higher levels of education (tertiary) playing a more important role in explaining ES, while lower levels of education (primary) being more important as determinants of ED. In the second part we explore the links between ED and ES and growth presenting evidence that ED and ES are linked to growth stability in SSA. This study also suggests that the Sub-Saharan countries that were more successful in achieving ED and ES tend to be more successful in improving the living conditions of their population. Using different variables of Infant Mortality (one of the MDG) and life expectancy as dependent variables, we present evidence that suggests that in SSA higher ED and ES are associated with lower infant mortality and higher life expectancy. We show that this result is robust, presenting positive and significant results even when a large number of different control variables are introduced, or when fixed effects and instrumental variables are considered. The evidence suggests that ED and ES are part of the solution for a successful development of SSA.

Determinants of Export Diversification: An Empirical Investigation

This paper assesses the role played by country specific factors as determinants of exports' diversification process. Using a panel data-set for 60 countries and twenty years (1985-2004) we confirm that even after clearing out differences in income per capita, cross section variability in the degree of exports' diversification is significant. In general, apart from per capita income, variables influencing the size of accessible markets (domestic and foreign) are the most relevant and robust determinants of the export diversification process. Diversification opportunities grow if countries are large, not located far from economic core areas and when barriers to trade are restricted.