Export Concentration Research Articles

The impact of information and communication technologies on export diversification: Evidence from developing countries

As economies increasingly rely on digitalization, information and communication technologies (ICT) have become critical in shaping global economic transformations. This study explores the impact of ICT on export concentration and diversification in emerging markets and developing countries. Using a panel data set of 110 countries from 2000 to 2019, the Generalized Method of Moments (GMM) estimator has been employed to assess the short- and long-term effects of ICT on these economies. To summarize information on various ICT channels, an ICT index has been constructed through principal component analysis (PCA). Additionally, the study examines the combined influence of ICT and human capital on export concentration. Findings indicate that ICT development significantly accelerates export diversification in developing countries, aligning their export structures with global standards. The interaction between ICT and human capital positively impacts export concentration, suggesting that higher levels of human capital enhance ICT's effects. Overall, ICT not only boosts human capital but also equips developing countries with the skills needed to enter new markets, develop high-value products, and compete globally. Consequently, governments in developing countries should prioritize investments in ICT infrastructure to lower trade costs, diversify exports, and promote sustainable economic growth.

Domestic Demand and Export Performance in CEMAC: An Assessment with Endogeneity-related Model

Based on several alternative approaches there is by now some evidence suggesting that there is a negative relationship between exports and domestic sales. But in the majority of cases this regularity has focused on industrialized countries. While the external trade of African countries faces numerous challenges, with the low level of intra regional trade and the concentration of exports in some raw materials. Thus the aim of this paper to assess this new export channel for African countries. We then estimate a dynamic panel model with an error correction mechanism of the export market share (the difference between exports and foreign demand) for the six economies of the CEMAC zone between 1974 and 2021. Through the use of instrumental variables (2SLS) we address the role of endogeneity. According to the results, such link is prominent for African countries such the CEMAC countries where domestic demand impacts effectively negatively exports in CEMAC with a negative elasticity of around 53 %. When allowing for an asymmetric relationship between domestic sales and exports the results remain unchanged suggesting that a significant relationship between domestic demand and exports performance still holds.

Export Diversification in Bangladesh: Overcoming Policy Impediments

Despite substantial socio‐economic progress driven by the readymade garment (RMG) industry, Bangladesh faces a severe export concentration due to its heavy reliance on a single export sector. This present paper examines the policy barriers hindering export diversification in Bangladesh and suggests measures to tackle the problem. It highlights that excessive tariff protection has favored import‐competing sectors creating an anti‐export bias. To promote export diversification, Bangladesh must implement effective tariff rationalization measures to address the policy‐induced disincentives for exports. Additionally, attracting foreign direct investment, improving the investment climate, and addressing infrastructural and logistical challenges are crucial for enhancing the non‐RMG export response.

Does the Development of Financial Services Improve Export Diversification? The Case of the Cemac Zone

Aims: The main objective of this paper is to analyze the effect of financial services development on export diversification in the countries of the Economic Community of Central African States. Methodology: We applied the two stage least squares estimation method on a panel model to capture the effects of financial services on Theil's export concentration index. The sample comprises five countries observed over the period from 2007 to 2022. Results: The results show that, the development of financial services and the increase in intra-regional trade in this community promote export diversification. In addition, increased investment and access to electricity are key to export diversification in this region. Recommendation and conclusion: Hence the need for these countries to implement policies conducive to trade liberalization and investment promotion in the CEMAC zone. Economic liberalization and investment development are essential to export diversification.

The Prospects of AfCFTA in Promoting Industrialization and Economic Diversification in Africa

African Continental Free Trade Area (AfCFTA) functions as a boost for Africa's economic development by enhancing intra-African trade. This is because trade is an engine of growth and development. For the fact that most African nations that are located within the same region engage in similar and competitive production, the ensuing economic cooperation and trade exchanges not only have the promise of increasing trade but also stimulating other ancillary economic activities, creating new job opportunities, speeding up economic growth, promote the standard of living, and promote economic development. However, AfCFTA's record has not been very impressive. The main obstacles to intra- regional commerce among African countries include heavy reliance on trade in primary goods, high product and market concentration of exports, and inadequate regional manufacturing networks. This study therefore examines continental economic trends and Intra African Trade: Prospects for African Continental Free Trade Area. The study adopted qualitative methods of data collection and analysis and the comparative theory of integration. The study found that the low level of trade diversification implicated the capacity of the African Continental Free Trade Area (AfCFTA) to achieve improved intra-regional trade performances in Africa. African countries maintain as much as 77% export specialization, with higher external/world trade at 84.6 percent of their total import and export trade. The study recommended that Governments should invest in infrastructure development, including building roads, railways, ports, and airports, as well as improving access to electricity and broadband. Governments should adopt modern trade facilitation measures such as electronic customs systems, single window platforms, and risk management techniques and should align their technical regulations and norms with global best practices and standards, as those created by appropriate international standard-setting organisations like the International Organisation for Standardisation (ISO).

The Impact of Export Concentration on the Ecological Footprint in the European Union

This study aims to evaluate the impact of export product concentration on the ecological footprint in the European Union between 1995 and 2018, using the environmental Kuznets curve framework. We utilized the pooled mean group/autoregressive distributed lag approach, which confirmed the environmental Kuznets curve hypothesis within the European Union. In addition, our findings reveal that export concentration has a negative impact on the ecological footprint, whereas energy consumption increases the ecological footprint. To further validate the obtained results, we conducted robustness checks using the fully modified ordinary least squares and dynamic ordinary least squares approaches, which validated the previous outcomes of the pooled mean group/autoregressive distributed lag approach. In the last step of our study, we employed the Dumitrescu–Hurlin causality analysis, which revealed a bidirectional causality involving the ecological footprint and energy consumption. These empirical findings directly result in valuable recommendations for policymakers.

The Belt and Road Initiative and export variety: 1996–2019

This study examines the association between the Belt and Road Initiative (BRI) and export variety (EV). We propose three hypotheses on how BRI may foster export markets (destinations) or export product lines. The estimates are based on a dataset constructed specifically for this analysis, covering 183 countries and linked with trade data from 1996 to 2019. We apply the instrumental variable (IV) approach in regressions for covering the endogeneity. The results indicate that participation in BRI is negatively related to EV. Specifically, we find evidence that, on average, BRI participants have less EV (by product and by destination) and greater export concentration. As regards participation in the Asian Infrastructure Investment Bank and BRI meanwhile (AIIB_BRI and AIIB_MOU), the results show a more negative effect. And there are heterogeneous effects of BRI across different economies and sectors.

Diversification of export activities: essence, purpose and state in Ukraine

Introduction. Export diversification is an essential tool for accelerating economic growth in developing countries. After all, these countries' exports are concentrated on raw materials and agricultural products, which are primarily sensitive to external shocks. By diversifying their exports, countries can reduce their vulnerability to fluctuations in foreign markets, including changes in demand, prices and terms of trade. This will stabilise the country's export earnings, ensure uninterrupted financing of imports and the development of various sectors of the national economy. In addition, diversifying export activities contributes to the structural transformation of the national economy and the country's innovative development. The purpose of the paper is to reveal the essence and functional purpose of export diversification in ensuring the country's economic development. The objective will be achieved by analysing the state of diversification of Ukraine's exports of goods and studying its relationship with the country's economic development. Results. Based on the analysis of changes in Ukraine's export commodity structure, the paper shows that in 2014-2023, there was a deepening of specialisation in Ukraine's exports of raw materials, food and agricultural products. At the same time, the share of medium and highly processed goods in Ukraine's export structure has decreased significantly. These trends are confirmed by the relatively high degree of specialisation of Ukrainian exports of goods over the period considered, as calculated by the normalised Herfindahl-Hirschman index. It is noted that the deepening concentration of Ukrainian exports of raw materials, food and agricultural products has been accompanied by slow growth or decline in GDP per capita. This confirms the hypothesis that there is a correlation between the diversification of export activities and a country's economic development level. Conclusions. According to the study's results, one strategy for Ukraine's economic growth under current conditions should be to diversify export activities and develop trade in goods with a medium and high degree of processing.

DIVERSIFICATION OF POLISH AGRI-FOOD EXPORTS

The aim of the article is to present the changes in the degree of geographical and product diversification of Polish agri-food exports in the years 2004-2022. The agri-food sector is a very important part of the Polish economy. It is also one of the few branches of the national economy that obtains a positive trade balance. The value of Polish agri-food exports reaches record levels every year. The strong concentration of Polish exports on the EU market, which accounts for over 70% of foreign sales, initially supported its development, currently is increasingly perceived as a threat to the agri-food sector in Poland. One of the most important ways to reduce risk in exports is to diversify them. The study assessed the product and geographical diversification of Polish agri-food exports based on the analysis of trade flows, the indicator of decomposition of export growth into intensive and extensive activities (based on the Amsoff matrix) and Herfindahla-Hirschmana (HHI) concentration indicators. The results of the analysis showed that the current increase in Polish agri-food exports was generated through intensive activities, i.e. increasing share of existing products in the existing market by acquiring new customers. In practice, it most often came down to lowering prices and taking advantage of the economies of scale. Currently, however, the possibilities of further competition on price are very limited. Therefore, entrepreneurs should strive to look for new markets for their products, but also to expand their offer with new or modified products with greater added value.

World’s concentration of forest products exports

The world’s economy has undergone several changes and crises that may have altered the dynamics and structure of the forestry market after 2008. Thus, the objective of this study was to measure the concentration of the international market of the main forest products between 2008 and 2018. We used the Concentration Ratio [CR(k)], Hirschman-Herfindahl Index (HHI), Theil Entropy Index (E) and Gini Coefficient (G) to evaluate the forest products concentration. Our results showed that American and Asian countries have risen and taken positions of major forest products exporters to European markets over the years. The main exported product was “Paper and cardboard”, followed by “Lumber”, “Pulp”, “Wooden panels”, “Wood for industrial purposes” and “Energy”. Brazil's global share stood out in the pulp and paper segments. The forest products market concentration was classified as low for CR4, moderately low for CR8, unconcentrated and highly competitive for HHI and Entropy indices. Furthermore, the market was classified with inequality from very strong to absolute using the Gini index indicating that exports come from a small number of nations.

Competition in the international cherry market: A competitiveness analysis of the developing country

This research assesses the competitiveness of Chilean cherry exports, with a specific focus on the Chinese market, identifying sectoral challenges and opportunities. Implementing quantitative, descriptive and non-experimental methodologies based on previous studies (Montes Ninaquispe et al., 2023), it utilizes the Herfindahl-Hirschman Index (HHI) for market diversification, the Trade Competitiveness Index (TC), and the Revealed Comparative Advantage Index (RCA) based on previous studies (Arbulú Ballesteros et al., 2024). The analysis reveals a significant concentration of exports to China, representing over 88 percent of Chile’s total cherry exports from 2018 to 2022, despite market volatility and a general trend of growth in both volume and value. The HHI indicates a high concentration risk due to dependency on the Chinese market, while the TC and RCA highlight a strong competitive and comparative advantage in this sector. The study concludes the need for market diversification to reduce dependency risks, suggesting the exploration of new markets like Thailand, South Korea, and Ecuador, alongside improvements in marketing strategies. Additionally, it recommends enhancing corporate innovation and operational efficiency via advanced production technologies and optimizing logistics and supply chain management to sustain the competitive advantage of Chilean cherry exports.

Food Safety Regulation and Their Impact on Azerbaijan Vegetable Oil Trade

The objective of the research was to assess the impact of the valid food safety regulations adaptation, based on the technical regulatory acts on vegetable oils to international requirements such as CODEX Alimentarius in the Republic of Azerbaijan, on total exports. After scientific works related to the research examination after analysing the data, it was determined that the majority of scholars focused on examining the impact of regulations on the expansion of export markets and the rise in the price of exported goods, rather than its effect on overall export volumes. To explore this further, the study initially investigated the contribution of vegetable oil exports to the overall export of food products in the Republic of Azerbaijan. Along with the Herfindahl Hirschman Index, which reflects the level of concentration of vegetable oil exports, statistical data analysis and comparison methods were used. One of the main essential issues when examining data on the vegetable oils export was the concentration level of vegetable oils export in the Republic of Azerbaijan. As a result of the analysis of export data for individual importing countries, it is clear that in 2022 the number of countries importing vegetable oils from the Republic of Azerbaijan has increased compared to 2019. In addition, with the help of the Herfindahl Hirschman Index, the degree of concentration of Azerbaijan's vegetable oil export was studied and it was found that although positive progress was achieved in the concentration level of the export market in the country compared to 2019, in general, the export market of vegetable oils was considered to be highly concentrated. In addition, although there was a negative relationship between the export amount of vegetable oils and the Herfindahl Hirschman Index, this relationship was not considered significant.

240 years of Swedish terms of trade – structure, volatility, and connection to economic growth

In this paper we present new foreign trade- and price data to analyze Swedish terms of trade in the very long run, from 1780 to 2018. We examine what influenced the trend in the terms of trade in the long run, particularly in how it related to the general trade structure. We also analyze the volatility of the terms of trade, and discuss how it might have affected economic growth in Sweden. The index improved slowly but substantially over the century from 1850 to 1950, which was likely connected to another poignant trend, a steadily increasing share of manufactures and finished goods in the export basket. In comparative perspective, Sweden had more industrial exports and lower export concentration than most of the rest of the European periphery, as well as much lower terms of trade volatility. We find that the growth trend and low volatility of Swedish terms of trade was positively connected with economic growth, but only really so from about 1850 to 1913. During this period the development of the terms of trade was particularly connected to increasing investment in new industries. The years from 1914 to 1960 were on the other hand characterized by high volatility in the terms of trade, and was still connected to high growth rates, such as during the interwar period. Hence, we conclude that while low volatility was connected to the onset of Swedish industrialization, it was also possible to maintain high growth rates during periods of high terms of trade volatility.

Why Pakistan Forges Ahead and India Lags Behind? Analysis of Sports Equipment Exports in Global Context

Focusing on India and Pakistan, this article examines their relative performance in sports equipment exports during the 2003–2020 periods. Utilizing secondary trade data available from UN Comtrade, it analyses their performance in sports equipment exports (HS-92) at the six-digit level, mainly to ascertain disparities in export performance at commodity level. Besides drawing inferences about global sports equipment exports (since 1990), it examines sports equipment export performance by tracing the pattern of export composition, export concentration and export growth, along with inferring the incidence of export instability, comparative advantage and trade balance. Indices like Herfindahl–Hirschman index (and its standardized version), Hall–Tideman index, entropy concentration index, Cappock instability index, Cuddy-Della Valle index, Balassa’s measure of comparative advantage and trade balance index are estimated to draw inferences. An analytical exercise indicates that India’s global share has not only declined over time, but it has also been lagging in exporting various types of sports equipment—its comparative advantage has waned over time, whereas such is not the case with Pakistan, which has recorded relatively better performance. A comparative perspective on the nature of the policy framework in both nations is drawn. Moreover, the article examines commodity-wise global dominance of India and Pakistan (in comparison with China) to trace commodities for which these countries have been gaining significance in global markets. Finally, the article urges the Indian State to devote serious attention to strengthening sports goods manufacturing in India, as India is currently facing a trade deficit in the global trade of sports equipment.

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.

THE CONCENTRATION OF THE AGRICULTURE AND LIVESTOCK SECTOR IN THE VISEGRAD GROUP AFTER MEMBERSHIP TO THE EUROPEAN UNION

In the study, after the European Union (EU) membership of the Visegrad group (since 2004), both export and import levels were analyzed in products representing the agriculture and livestock sector. The results of the analysis show us that. The fact that the Visegrad group has EU membership has reduced the level of concentration over time. CR and HHI, the two most commonly used concentration analyses in the literature, were used as methods. Among the Visegrad countries, the country with the highest concentration of exports in agricultural and livestock products is Hungary and the country with the lowest is Poland. On the contrary, the country with the highest concentration of imports is Poland and the country with the lowest concentration is Hungary.

Does corporate income tax reduction prompt firm export concentration?

Analyzing the impact of changes in corporate income tax policy on firm exports provides a critical assessment of the effectiveness of tax policies in stimulating export growth. It offers insights into the influence of tax policies on intra-firm resource allocation efficiency. However, there is limited attention in the literature devoted to examining firms’ export responses to these tax policy shifts, often overlooking the underlying mechanisms. This study investigates the causal relationship between reduction in corporate income tax rate and adjustment in export structure, employing a difference-in-differences approach and drawing on data from Chinese manufacturing firms between 2000 and 2013. Our findings indicate that China’s corporate income tax reform in 2008 heightened the concentration of firms’ export products by enhancing labor productivity and facilitating the accumulation of fixed assets. Additionally, this tax reduction expanded the range of exported products and increased the proportion of firms’ core and high-technological products.

Country-Based Export Concentration of Türkiye and BRICS and Export Similarity to the EU Market (2001-2021)

The aim of the study is to examine the country-based concentration of exports of Türkiye and BRICS (Brazil, Russia, India, China, South Africa) and export similarity to the European Union (EU) common market. Data were obtained from the International Trade Center Trademap database. In the study, according to the data of 2021, Türkiye and the first five countries in the export of BRICS are included. While the country-based concentration of Türkiye and BRICS for the period 2001-2021 was analyzed using the Gini-Hirschman Index (GHI), the Export Similarity Index (ESI) was used for export similarity to the EU common market. The results of the study show that while the product variety in Türkiye's exports to the United Kingdom, the United States, and Germany has increased significantly over time, the product variety in exports to Italy and Spain shows a fluctuating course, according to the coefficient values calculated by the GHI method. While there was no major change in product diversity in BRICS exports to the USA, Japan and South Korea during the period under review, product diversity in exports to Hong Kong showed a fluctuating course, but product diversity decreased significantly in 2021. There is no radical change in product diversity in BRICS exports to China. The fact that the exports of Türkiye and BRICS to the EU market have an ESI value of 60.75 means that they are in competition in the relevant product groups and pose a threat to each other.

Export concentration in developing countries: do real exchange rate misalignments matter?

Export concentration in developing countries: do real exchange rate misalignments matter?

Where Does Value-Added Flow in Gross Exports, Mr. Newton? Global Supply Chains and New Regionalization's Effects in the Asia-Pacific

The New Trade Theory proposes that participating in global supply chains (GVCs) enhances productivity and economies of scale. However, recent events like the COVID-19 pandemic and Ukraine crisis have exposed the vulnerabilities of GVCs to global risks. This study investigates the relationship between gross exports and the domestic value-added content of such exports, considering various factors, including labor productivity, especially in Belt and Road Initiative countries (A-P Belt and Road Initiative [BRI]). We analyze the role of GVCs using cross-sectional and panel data from the 2021 OECD Trade in Value-Added. Over the period from 2009 to 2018, we observed that countries with increasing productivity exported goods, services, and value-added to other countries experiencing similar productivity. Our findings indicate that export concentration contributes to increased value-added exports. However, we could not validate the effects of R&D spending, the real effective exchange rate, foreign direct investment inflows, and A-P BRI membership contributions using the difference-in-differences method.