Export Diversity Research Articles

Capabilities' substitutability and the “S” curve of export diversity

Product diversity, which is highly important in economic systems, has been highlighted by recent studies on international trade. We found an empirical pattern, designated as “S-shaped curve”, that models the relationship between economic size (logarithmic GDP) and export diversity (the number of varieties of export products) on the detailed international trade data. As the economic size of a country begins to increase, its export diversity initially increases in an exponential manner, but overtime, this diversity growth slows and eventually reaches an upper limit. The interdependence between size and diversity takes the shape of an S-shaped curve that can be fitted by a logistic equation. To explain this phenomenon, we introduce a parameter called “substitutability” into the list of capabilities or factors of products in the tri-partite network model (i.e., the country-capability-product model) of Hidalgo et al. As we observe, when the substitutability is zero, the model returns to Hidalgo's original model but failed to reproduce the S-shaped curve. However, in a plot of data, the data increasingly resembles an S-shaped curve as the substitutability expands. Therefore, the diversity ceiling effect can be explained by the substitutability of different capabilities.

Comments on “The “S” curve relationship between export diversity and economic size of countries”

• An alternate method is introduced to predict analytically the S-shaped curve that was presented by Hu et al. (2012) [1] .

India's exports performance in poultry products and the potential exports destinations

The study analyzes the trends in the Indian poultry products’ exports during the pre- and the post-WTO periods using the Hodrick-Prescott (HP) filtered data. The Simpson Diversity Index (SDI) was used to measure the export diversity, whereas the Revealed Comparative Advantage (RCA) and the Revealed Symmetric Comparative Advantage (RSCA) ratios assessed the competitiveness of poultry products in the international market. India has been highly competitive in the exports of hen-eggs-in-shell and eggs-dried, whereas India needs to maintain its competitive position with respect to eggs-liquid and live-ducks. India could not retain its competitive position in live chicken exports due to the rising production cost coupled with the onslaught of the Avian Influenza (AI) in the recent years. Spreading of the AI put a heavy toll on poultry exports, especially chicken meat and eggs-liquid due to a complete ban on Indian poultry products imposed by many of the importing countries. The SDI indicated that poultry products’ exports were more diversified during the post-WTO period. On the basis of the available data on the average ad-valorem applied duties faced by the Most Favoured Nations (MFN), the producers’ price in various countries for chicken meat and eggs (hen-egg-in shell) and shipping charges from India to various countries, the lucrative export destinations for such poultry products were identified.   

Global mindset – a cognitive driver of small and medium‐sized enterprise internationalization

PurposeGlobal mindset has gained the respectable attention of international business scholars. Global mindset is a multidisciplinary concept comprised of cognitive and cultural dimensions which both influence the international behavior and decision making of the firm. The key purpose of this paper is to demonstrate that global mindset is a crucial cognitive driver of the small and medium‐sized enterprise (SME) internationalization process. In order to do so, it aims to establish the link between global mindset and export performance outcomes.Design/methodology/approachUsing a literature review, the conceptual model was developed. Data were obtained through survey questionnaire and analyzed using partial least squares (PLS) path modeling on the sample of 121 exporting SMEs in Croatia.FindingsFindings of this study suggest that global mindset is positively, directly and significantly related to the export performance. Furthermore, the link between global mindset and export performance was assessed with the moderating effect of international experience (export diversity and export intensity) and findings reveal that there is no significant moderating effect present.Research limitations/implicationsFindings of this study suggest that global mindset is a crucial driver of the SME internationalization process as it exhibited a significant impact on the export performance outcomes. However, the focus of this paper was solely on the strategic (cognitive) dimension of global mindset. Future studies are yet to reveal the relevance of the integrated concept of global mindset.Originality/valueThe value‐added of this study is in the idea that market‐specific experience cannot be easily transferred to other foreign markets by utilizing global mindset. The moderating effect of international experience dimensions on relationship between global mindset and export performance was found to be insignificant. Eventually, findings suggest that global mindset is not related to the SME's international experience.

The “S” curve relationship between export diversity and economic size of countries

The highly detailed international trade data among all countries in the world during 1971–2000 shows that the kinds of export goods and the logarithmic GDP (gross domestic production) of a country have an S-shaped relationship. This indicates that all countries can be divided into three stages accordingly. First, the small economies always export very few kinds of products as we expect. Second, once the economic size magnitude (log(GDP)) of a country is beyond a threshold, its export diversity may increase dramatically. However, this is not the case for large economies because a ceiling on the export diversity is observed when their logarithmic GDPs are higher than another threshold. This pattern is very stable for different years although the concrete parameters of the fitting sigmoid functions may change with time. In addition, we also discussed other relationships such as import diversity with respect to logarithmic GDP, diversity of exporters with respect to the number of export goods etc.; all of these relationships show S-shaped or power law patterns which can be derived by the “S” curve relations. Although this paper does not explain the origin of the S-shaped curve, it may provide a basic empirical fact and insights for economic diversity.

Export diversification and economic performance: evidence from Brazil, China, India and South Africa

In this paper we discuss relationship between export diversity and economic performance, focusing on Brazil, China, India and South Africa (BCIS). Using time data on exports over the period 1962–2000 and Applied General Equilibrium (AGE) models for each country, we note the similarities as well as differences in the patterns of diversification in these countries. We find evidence of a U-shape relationship between per capita income and export specialization in at least China and South Africa, and given that the results from Granger causality testing are inconclusive and not robust with regards to export diversification measures, some preliminary evidence from the results suggest that export diversification Granger causes GDP per capita in Brazil, China and South Africa, but not in India, where it is rather GDP per capita changes that are driving export diversification. From AGE modeling we find that South Africa differs from the other economies in that it is the only case where export diversification has an unambiguously positive impact on economic development while in contrast in Brazil, China and India, it is rather export specialization that is preferred. We show that the manner in which export diversification is obtained may be important: if it is obtained with less of a reduction in traditional exports, the impacts are better (less negative).

Increasing Africa’s Participation in Global Trade: The Role of Market Access and Domestic Infrastructure Afrikas Beteiligung am Welthandel stärken: Die Rolle des Marktzugangs und der inländischen Infrastruktur Augmenter la participation de l’Afrique au co

For many years, African countries have experienced slow economic growth. A major policy tool used to address this issue has been preferential market access whereby, certain developed countries have lowered and sometimes eliminated tariffs on imports from Africa. Despite this special treatment, however, there has been a sharp decline in Africa's global trade participation in the last few decades. There are many factors that may explain this phenomenon. First, while on average Africa has relatively good access to foreign markets, individual countries within the continent continue to face high tariff barriers. Second, preferential market access conceded to Africa has often been accompanied by numerous non-tariff barriers inhibiting African exports. Third, most African countries lack adequate trade facilitating infrastructure. All these factors suggest that the problem with Africa's low global trade participation cannot be addressed entirely using one policy approach. Along with increased market access, improving trade-related infrastructure and promoting aid for trade initiatives are crucial measures toward helping poor countries overcome supply-side constraints and integrate into the global economy. In fact, although preferential schemes have a large and positive impact on Africa, at times they are not sufficient and may even cause harm due to the narrow base of export diversity among African economies.

R&D accessibility and regional export diversity

This paper examines the influences of accessibility to R&D on the export diversity in Swedish regions. A theoretical model with fixed R&D cost predicts that spatial knowledge spillovers generate external economies of scale in R&D activities. These external effects are presumed to increase regions’ innovative capacity. Moreover, the model implies that the effects of R&D on regional export performance are reflected by the size of the export base rather than by the export volumes. The empirical analysis focuses on three different indicators of export diversity: the number of exported goods, the number of exporting firms and the number of export destinations. The hypothesis that regional accessibility to R&D facilities in the private business sector, on the one hand, and university research departments on the other hand, increases the export diversity in regions is tested in a spatial cross-regressive model. Since knowledge cannot be regarded as a spatially trapped resource the empirical analysis includes two measures of R&D accessibility: intra-regional and inter-regional. The empirical results indicate that the three indicators of regional export diversity are positively affected by the intra-regional accessibility to company R&D in commodity groups that have a relatively high R&D-intensity in production. Inter-regional accessibility to company R&D has significant positive impacts on the number of export goods and the number of export destinations also in less R&D-intensive industries. In the case of university R&D, the empirical results are weaker, in particular in the case of intra-regional accessibility. Yet, the inter-regional accessibility to university R&D has a significant positive impact on the number of export goods and the number of export destinations in the majority of commodity groups.

EXPORT DIVERSIFICATION AND INTRA-INDUSTRY TRADE IN SOUTH AFRICA

This paper uses cumulative export experience functions to explore the structural dynamics of South Africa's exports for the period 1990–2003. It finds a large spread of emerging non-traditional accelerating export products across industry clusters of different factor intensities, steadily increasing their proportion in total exports and her main markets. Shift-share and correlation analyses show that increased intra-industry specialisation and trade within import competing product groups explain the structural change in the direction of export diversity. With respect to quality, as measured by relative unit prices of exports and imports in intra-industry trade with the EU and the US, a relative improvement of export quality is found.

The impact of firm and export characteristics on the accuracy of export sales forecasts: evidence from UK exporters

The empirical literature on forecasting practice has hardly distinguished between export and domestic sales forecasting. This is surprising given the importance of exporting for companies and the additional difficulties involved in preparing export as opposed to home market forecasts. Drawing from the forecasting and export literatures, this study examines several linkages between firm and export characteristics and the accuracy of short- and medium-term export sales forecasts (as captured by self-reported MAPEs). Using survey data derived from UK exporters in the manufacturing sector and a multivariate analytical framework, the results indicate that export experience (as reflected in the firm's stage in the export life cycle), export diversity (as reflected in the number of export markets served) and the turbulence of the export environment are the key variables affecting export sales forecast accuracy. The implications for the study of export sales forecasting practice are considered and future research directions suggested.