Economic Benefits of Export Diversification in Small States

24 Pages Posted: 22 May 2018

See all articles by Arnold McIntyre

Arnold McIntyre

International Monetary Fund (IMF)

Mike Xin Li

International Monetary Fund (IMF)

Ke Wang

International Monetary Fund (IMF)

Hanlei Yun

International Monetary Fund (IMF)

Date Written: April 2018

Abstract

The paper considers concepts of economic diversification with respect to exports (including service sectors) for small states. We assessed the economic performance of different groups of 34 small states over the period of 1990-2015 and found those more diversified experienced lower output volatility and higher average growth than most other small states. Our findings are consistent with conventional economic theories but we found that export diversification has a more significant impact on reducing output volatility than improving long run growth in small states. Diversification requires fundamental changes and should be contemplated in the context of a cohesive development strategy.

Keywords: Export diversification, Small states, Economic growth, Tourism, Trinidad and Tobago, Mauritius, small states, export diversification, economic growth, growth volatility, tourism

JEL Classification: O24

Suggested Citation

McIntyre, Arnold and Xin Li, Mike and Wang, Ke and Yun, Hanlei, Economic Benefits of Export Diversification in Small States (April 2018). IMF Working Paper No. 18/86, Available at SSRN: https://ssrn.com/abstract=3182512

Arnold McIntyre (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mike Xin Li

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ke Wang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Hanlei Yun

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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