Export Product Diversification Research Articles

Skilled emigration in a world of variety

Upgradation of export product quality and product diversification are two crucial determinants of the economic growth of developing countries. Both depend heavily on the endowment and quality of the skilled labor. However, one of the challenges developing countries face is the emigration of skilled labor. In this paper, we intend to explore the effect of skilled labor emigration on the export product quality, the number of varieties produced (extensive margin), and the amount of production (intensive margin). To do so, we provide a theoretical framework followed by empirical evidence. Results suggest that export product quality deteriorates with an outflow of skilled labor. Moreover, the number of varieties produced by the domestically specialized manufacturing or domestic service sectors falls but the total amount of production increases. This product diversification at the domestic level has a similar impact on export diversification when we have skilled emigration. The theoretical results have been examined empirically in this paper.

The Role of Downstreaming the MSME Industry and the Green Economy in Supporting National Economic Growth

The downstream program issued by the Indonesian government is not only for the mining sector, but also other sectors including micro, small and medium enterprises (MSMEs).In the midst of the potential for downstreaming, there are various challenges that are still emerging, both the impact of downstreaming on the economy which needs to be expanded, as well as challenges related to production factors, as well as regulations in terms of implementing green industry. With the implementation of this green industry, it is hoped that it can increase competitiveness with environmentally friendly production processes and results. This research was conducted with the aim of analyzing the influence of downstream policies for the MSME industry and the implementation of a green economy on national economic growth. The analysis technique used is SEM (Stuctural Equation Modeling) which is operated through the AMOS 24 application. The test results found that the economic downstream policy, apart from supporting economic growth, also provides added value and diversification of Indonesia's superior export products. The downstreaming of various commodities also supports the Green Economy in Indonesia. This industrial downstream policy is also an important foundation for advancing the Indonesian economy in making leaps in Indonesia's economic growth globally. These findings can support the next Indonesian government to continue the industrial downstream policy until Indonesia becomes a developed country.

The role of tourism development in boosting export product diversification in China: A provincial perspective

Tourism has emerged as a major sector, and it is considered a significant contributor to the development of the host countries. Tourism development (TD) is believed, inter alia, to be a key promoter of export product diversification (EPD). This study explores the liaison between tourism development and export product diversification in China and across its regions (i.e., Eastern, Central, & Western) using the data for the period of 2011-2019. The Driscoll-Kraay standard errors (DKSEs) is adopted for empirical analysis along with feasible generalized least-squares (FGLS) and panel-corrected standard errors (PCSEs). The findings revealed an inverted U-shaped liaison between the TD and EPD. The estimates are robust and insensitive to econometric models, measures of tourism development, and the inclusion of other key covariates. The relationship between industrial structure, natural resource endowments, human capital, and economic growth is positive and statistically significant. The study revealed similar findings that were significant across regions. The policy insinuation is that the government should devise such policies to boost TD in order to promote EPD and sustainable development.

Does tourism development spur export product diversification?

ABSTRACT The growing interest in tourism has motivated scholars to explore the macroeconomic effects of its development. However, there remains an unexplored gap in the literature, which is the impact of tourism development on export product diversification (EPD). Using data from 150 countries and applying a system generalized method of moments (GMM) estimator, this study tests the effect of tourism development on EPD and its two dimensions, namely the extensive and intensive margin. The results are compared in groups of countries with different income levels. The findings suggest that international tourist arrivals and receipts spur EPD. We also find that the pro-diversification impact of tourism development in low-income economies is greater than in high-income economies. In addition, when the sub-dimensions of EPD are considered, we observe that the effect of tourism development on the extensive margin is greater than the intensive margin. These results have important implications for policymakers.

Impact of Export Diversification on Economic Growth in Sub-Saharan Africa (SSA)

This study investigated the impact of export diversification on the economic growth of countries in Sub-Saharan African (SSA). Trade Data are gathered from the World Integrated Trade Solution (WITS), and UN Comtrade database, using a 6-digit level range of the Standard International Trade Classification (SITC) and the Harmonised System (HS) for the Countries. Export diversification Indices data are proxies from the Herfindahl Hirschman Index (HHI) which represents the level of export product diversification for all forty-eight (48) SSA Countries between 1995 and 2020. The Panel Autoregressive Distributed Lagged Model (P-ARDL) was applied in the study. Other analysis including correlation analysis, multicollinearity, and Unit Root tests were used to achieve the objective of the study. The findings showed that export diversification has not really benefitted the SSA Countries; also, exporting raw materials and other primary products does not benefit the region, and therefore, the countries should continue leveraging on the potential of diversifying their exports and exploring sectors such as the manufacturing to attain more economic gains. To achieve export gains, oil/minerals products should be exported as finished products, not as raw materials, especially, from those nations that are resources endowed. These raw materials should be best used domestically to aid production into finished/refined products for subsequent exports.

Exploring Product Diversification Opportunities in Pakistan for Export Growth

Diversification brings economic growth and forms a diversified production structure in any developing country. The purpose of this study is two-fold: attempting to decompose product exports of two key sectors (textile and sports) and measure the significance of intensive, extensive, and new products towards export growth. The study finds the long-run association between GDP per capita and the three indices of export product diversification i.e., intensive and extensive margins and product diversification (Theil index). By selecting the top five exporting countries, the decomposition was achieved by using the (Amiti and Freund, 2008) methodology while for the accomplishment of the second objective, the paper used the ARDL Bound testing procedure. Hence, the results showed positive export growth from 2009 to 2020. The intensive margin contribution to the export growth was significant in the case of 26 textile subdivision products. However, in the main subsector of textile (65 division), the contribution from the new products is large and more significant compared to other sub-sectors. By applying the ARDL testing method, the results of the quantitative analysis confirmed the positive and significant long-run relationship among GDP per capita, product export diversification, and extensive, and intensive margins. Both quantitative and qualitative analysis suggests that Pakistan’s government should encourage the diversification in traditional as well as new product exports with investment and innovation. More attention to innovation in the textile and apparel sector is recommended as this sector has more potential. The sports industry, on the other hand, has potential and should be given a boost through timely investment and policy formulation.

An empirical assessment of the role of trade in services in export product diversification in Sub-Saharan Africa

An empirical assessment of the role of trade in services in export product diversification in Sub-Saharan Africa

Economic progress in emerging countries: the roles of diversification of import and export products and energy consumption

Economic progress in emerging countries: the roles of diversification of import and export products and energy consumption

Export Product Concentration and Poverty Volatility in Developing Countries

ABSTRACT The present article has examined the poverty volatility effect of export product concentration using a panel dataset of 120 developing countries over the period of 1980 to 2014. Results, based on the feasible generalized least squares estimator, suggest that export product concentration tends to induce greater poverty volatility in low-income countries but reduces poverty volatility in relatively advanced developing countries. These outcomes reflect the fact that export product concentration reduces poverty volatility in countries that improve their manufactured export performance. Finally, the greater the level of export product diversification (or economic complexity), the higher the degree of poverty volatility reduction.

Temporary extra-regional linkages and export product and market diversification

ABSTRACT While considerable attention has been paid towards how some long-lasting extra-regional linkages such as foreign direct investments facilitate interregional knowledge transfer, less is known about the role of temporary extra-regional linkages formulated via trade fairs. This paper seeks to fill this gap by focusing on the China Import and Export Fair and examining the relationship between temporary extra-regional linkages forged by trade fairs and regional export dynamics. In doing so, we also speak with the literature on ‘temporary clusters’. Our second contribution is to differentiate export market and product diversification, and to show distinct effects of temporary extra-regional linkages on those two.

Exporters in Africa: What Role for Trade Costs?

This paper investigates the role of trade costs for exporter dynamics in Africa. In comparison to exporters from other regions, African exporting firms are fewer, smaller, and relatively less diversified in terms of products and destinations. African countries also display the highest rates of entry, exit, and turnover of exporting firms, exporting products, and export destinations. This suggests that Africa’s exporting activity is volatile and subject to much experimentation, with exporters facing difficulties maintaining trade relationships. The analysis also confirms that trade costs are a crucial factor in explaining exporter performance in Africa vis-à-vis other regions, but also among African countries. Trade costs play a disproportionate role in affecting the size of new exporters and the survival of exporters in Africa. Also, trade cost differences across African countries are a relevant factor in explaining the lower market diversification of exporters from landlocked countries. A key implication is that the African Continental Free Trade Area can bring many benefits in terms of export flows and destination markets. Yet, without strengthening productive capacities, the diversification of export products will likely remain limited.

Porter’s Five Forces Analysis of Zanzibar’s Seaweed Industry

Aim: This study intended to analyse the Zanzibar seaweed industry’s (ZSI) profitability potential by adopting Porter’s five forces industry analysis framework. The objective was to identify factors in its structure contributing to the industry’s ongoing primary challenge of low returns.
 Methodology: The study was conducted on Zanzibar island in the United Republic of Tanzania. A case study design approach was adopted. The study’s sample consisted of seaweed farmers, exporters and officials from government institutions linked to the industry. Seaweed farmers were selected through multistage and quota sampling. Exporters were chosen based on experience, i.e. at least five years of operations and above. Government officials were selected through purposive and convenience sampling. The study utilised both primary and secondary data. A triangulation approach was adopted for data collection. Data analysis was done through thematic analysis, descriptive statistics and literature review. Results were adapted into Porter’s framework for further analysis. The threat level for each Porter’s force was determined by weighing their corresponding driving factors, and respondents rated the final results based on the perceived threat level.
 Results: The study found that the Zanzibar seaweed industry has low profitability potential. Threats emanate from the industry’s lack of entry barriers, several available cheap and high-performing substitutes, low switching costs and high bargaining power of buyers and suppliers. The government’s role in promoting the industry’s activities is almost non-existent. Similarly, the industry’s production methods were found to be still traditional. Innovative activities were found to be minimal. In terms of opportunities, the industry remains a viable economic alternative for the rural Zanzibarians due to its low capital entry requirements and short production cycles. The potential for increased income and improved health and nutrition exists if domestic markets are established. The growing global demand for carrageenan also signals the industry’s revenue and income growth potential. Similarly, the ZSI is also a source of economic gender empowerment for rural Zanzibari women.
 Conclusion: Zanzibar’s seaweed industry’s low profitability potential is a result of its structure, production system and the absent role of the Revolutionary Government of Zanzibar (RGoZ). Due to the unique nature of ZSI challenges, Porter’s generic strategies were found unsuitable. Hence, this study recommends creating a guiding industry business strategy and marketing plan to guide its activities. The industry’s customer base should also be diversified to expand buyer options and minimise risks associated with the global Rhodotypa market’s oligopolistic conditions. The creation of domestic and regional demand is also crucial. The Revolutionary Government of Zanzibar should also step in to give the necessary support, primarily through creating industry policy. Additionally, diversification of ZSI export products through establishing carrageenan extraction industries in Zanzibar is vital.

Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences Offered by the QUAD Countries

This paper investigates the effect of Aid for Trade (AfT) flows and foreign direct investment (FDI) inflows, as well as their interplay on the utilization of non-reciprocal trade preferences (NRTPs) offered by the Quadrilaterals (i.e., QUAD countries, which are Canada, the European Union, Japan, and the United States). Two major blocks of NRTPs provided by the QUAD countries have been considered, namely, the Generalized System of Preferences (GSP) programs and other NRTPs. The analysis has covered 114 beneficiary countries of these NRTPs and the period of 2002–2018. Several findings have emerged from the analysis. Total AfT flows and FDI inflows contribute to enhancing the utilization rate of both GSP programs and other NRTPs, and are strongly complementary in affecting positively the utilization of both types of NRTPs. Finally, beneficiary countries’ level of export product diversification matters for the effect of both AfT flows and FDI inflows on the utilization of NRTPs. The conclusion section discusses the implications of these findings.

What does export diversification do for energy demand? Evidence from the Global North.

This paper contributes to the trade-energy literature by examining the effect of export product diversification on the energy demand of 30 countries located in the Global North over the period 1980-2014. A nonparametric time-varying coefficient panel data model with fixed effects is employed for its ability to produce robust outcomes in the presence of parameter instabilities, nonstationarity, regime shifts, and time variations. As a second step, the paper also utilizes the nonparametric fixed effects extension of Driscoll and Kraay, which is robust to spatial/cross-sectional dependence, as well as to autocorrelation and heteroscedasticity. The results indicate that export diversification lowers overall energy demand in the Global North, and the size of the impact has been on a gradual increase over the years. The paper concludes that if a conscious effort is made to ensure that product diversification is towards energy-efficient goods, export product diversification can serve as a useful strategy for managing energy consumption and mitigating its negative environmental effects.

Investigating the impact of export product diversification on environmental degradation: evidence from Chinese Provinces

Investigating the impact of export product diversification on environmental degradation: evidence from Chinese Provinces

Does export product diversification reduce sulfur dioxide emissions in China? A regional analysis

Does export product diversification reduce sulfur dioxide emissions in China? A regional analysis

The Effect of Export Product Diversification on Ecological Footprint

Amaç: Bu çalışmanın amacı Türkiye örnekleminde ticaret ile çevresel bozulmayı ihracat ürün çeşitlendirmesi ve ekolojik ayak izi bağlamında değerlendirmektir. Tasarım/Yöntem: Çalışmada 1962-2014 dönemini kapsayan veriler kullanılarak ekonometrik analizler yapılmıştır. Augmented Dickey-Fuller (ADF) ve Phillips Perron (PP) ile birim kök analizleri yapılmıştır. Çalışmada birim kök sonuçlarına göre Johansen eş bütünleşme analizinin kullanılmasına karar verilmiştir. Son olarak modeldeli uzun dönem katsayılarının tahmini için Tam Düzeltilmiş En Küçük Kareler Yöntemi (FMOLS ) kullanılmıştır. Bulgular: Analizler sonucunda; seriler arasında eşbütünleşme ilişkisinin var olduğu tespit edilmiştir. FMOLS ile yapılan uzun dönem katsayı sonuçları ise enerji tüketimi ile yenilenebilir enerji tüketiminin istatistiksel olarak anlamsız olduğunu göstermektedir. Diğer değişkenler için ise bulgular göstermektedir ki ekonomik büyüme ve ihracat ürün çeşitlendirmesi değişkenlerinde meydana gelen %1’lik artış ekolojik ayak izini sırasıyla, %0.21 ve %0.17 arttırmaktadır. Sınırlılıklar: IMF tarafından yayınlanan ihracat ürün çeşitlendirmesi verisi 2014 yılına kadar mevcut olduğundan çalışma 2014 ile sınırlandırılmıştır. Özgünlük/Değer: İhracat ürün çeşitlendirmesi dış ticaretin özelliklerini diğer ticaret değişkenlerine göre daha iyi yansıtmakta olup son yıllarda literatürde fazla kabul görmektedir. Benzer şekilde çevre değişkeni olarak da ekolojik ayak izi karbon emisyonlarına göre daha kapsayıcı olduğu için tercih edilmiştir. Türkiye’de ekolojik ayak izi ile ihracat ürün çeşitlendirmesi arasındaki ilişkiyi ortaya koyan ilk çalışma olması dolayısıyla bu çalışma literatürde önemli bir katkı sağlayacaktır.

What does the EKC theory leave behind? A state-of-the-art review and assessment ofexport diversification-augmented models.

Over the past three decades, researchers have extensively examined the environmental Kuznets curve (EKC) hypothesis. Despite their early focus on the ecological impacts of anthropogenic development, associated conclusions differ and often conflict. In this study, we conducted a state-of-the-art review of this topic and shed light on the methodological challenges that the literature attempted to overcome so far. Since China is going through structural economic changes and environmental reforms, we relied on this illustrative case and developed an augmented-EKC framework to investigate whether this hypothesis holds between export product diversification and environmental pollution, stratifying by carbon energy content: renewable (Model 1) and fossil energy (Model 2). Quarterly data are collected over the most available and recent period (i.e., 1990Q1-2018Q4) and computed by applying the Quadratic Match-Sum Method (QMS) on annual series. Besides, per capita income and foreign direct investments are included as additional factors to the baseline models specifications. The empirical analysis comprises the Clemente–Montanes–Reyes unit root test with structural break and additive outlier, the autoregressive distributed lag (ARDL) bounds test for cointegration, the Granger causality test, and dynamic (DOLS) and fully modified OLS (FMOLS) estimators, followed by robustness checks confirming the stability of the coefficients exhibited in the two autoregressive settings. For both models, empirical results failed to support the existence of an inverted-U-shaped relationship among export product diversification and carbon release from fuel combustion in China. Also, as income grows, low-carbon resources seem improving export diversification and vice versa. Related findings are thought to bring robust inferences able to complement the existing literature and open a fruitful research direction.

STRATEGI KEMUDAHAN BERUSAHA DALAM MENINGKATKAN DAYA SAING EKONOMI INDONESIA DI BIDANG EKSPOR DAN INVESTASI

Doing Business measures the regulatory aspects of business, affecting small domestic companies located in the largest business cities of 190 economies and covering 11-second city economies. The purpose of this research is to understand the obstacles faced by the Indonesian government in the field of exports and investment related to the ease of doing business.
 The research method used is qualitative research. The source of research data is secondary data, which comes from indirect observations and documents. The research findings are to develop strategies to increase exports and investment in the Covid-19 era. The contribution of this research is the implementation of strategies to increase exports and investment in the era of the covid-19 pandemic, which has undermined Indonesia's economic growth.
 Conclusions: (a) the government can overcome obstacles to ease of doing business by using increased policies through business regulatory reforms in 10 fields, (b) eliminating export constraints by making policies to secure an export share in key markets, increasing diversification of export products, expanding export destinations to markets prospectively, (c) eliminating investment constraints by implementing policies to encourage the creation of legal certainty, providing ease of licensing and non-licensing, as well as developing an information service system and electronic information licensing, (d) Bank Indonesia supports the government's strategy through its monetary policy.

An Empirical Note on the Effect of Poverty on Economic Complexity

This empirical note aims to complement the works by Gnangnon (2019) on the effect of poverty on export product diversification in developing countries, and Gnangnon (2021) on the effect of economic complexity on poverty in developing countries. It investigates the latter issue the other way around. In other words, it uses a panel dataset of 135 countries over the period of 1998-2019, and the two-step system Generalized Method of Moments estimator to explore the effect of poverty on economic complexity, which is a strong predictor of economic growth and development. The analysis has revealed that higher poverty levels influence negatively economic complexity, and advanced countries tend to bear a higher negative effect of poverty on economic complexity than relatively less advanced economies. These findings underline the need for fostering efforts at both national and international levels to fight poverty. Through a variety of channels, pro-poor policies would ultimately contribute to greater economic complexity, and consequently promote economic growth and development.