Export Diversification: What's Behind the Hump?

38 Pages Posted: 31 Jan 2015

See all articles by Olivier Cadot

Olivier Cadot

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Centre for Economic Policy Research (CEPR); World Bank

Celine Carrere

Université d'Auvergne - Clermont 1 - CERDI

Vanessa Strauss‐Kahn

ESCP Europe; Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

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Date Written: January 29, 2010

Abstract

The paper explores the evolution of export diversification patterns along the economic development path. Using a large database with 156 countries over 19 years at the HS6 level of disaggregation (4,991 product lines) we look for action at the “intensive” and “extensive” margins (diversification of export values among active product lines and by addition of new product lines respectively) using various export concentration indices and the number of active export lines. We also look at new product introduction as an indicator of “export-entrepreneurship”. We find a hump-shaped pattern of export diversification similar to what Imbs and Wacziarg (2003) found for production and employment. Diversification and subsequent re-concentration take place mostly along the extensive margin, although the intensive margin follows the same pattern. This hump-shaped pattern is consistent with the conjecture that countries travel across diversification cones, as discussed in Schott (2003, 2004) and Xiang (2007).

Keywords: Export diversification, International trade

JEL Classification: F1, O11

Suggested Citation

Cadot, Olivier and Carrere, Celine and Strauss‐Kahn, Vanessa, Export Diversification: What's Behind the Hump? (January 29, 2010). Review of Economics and Statistics, Vol. 93, No. 2, 2011, Available at SSRN: https://ssrn.com/abstract=2557500

Olivier Cadot (Contact Author)

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

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Celine Carrere

Université d'Auvergne - Clermont 1 - CERDI ( email )

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Vanessa Strauss‐Kahn

ESCP Europe ( email )

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