Export Product Range and Economic Growth in the EU Countries

27 Pages Posted: 7 Mar 2019

See all articles by Ville Kaitila

Ville Kaitila

ETLA, Research Institute of the Finnish Economy

Date Written: March 2019

Abstract

We analyse the number of different HS8 products in the EU countries’ exports in 1995–2015. We review what share, or coverage, of the total possible number of these products the countries have exported each year. The EU15 countries have typically witnessed a slow rise in this coverage rate, that is, a widening of their extensive margins. The exception is Finland where the share has declined considerably. On the other hand, Ireland, Greece, Portugal and the new member countries have seen a dramatic increase in their export product coverage. We analyse how the development in the coverage rate and, as a comparison, the diversification of exports as measured by the Herfindahl–Hirschman index are associated with GDP per capita growth. We find that changes in the former measure are positively associated with economic growth after we have controlled for GDP per capita catching‐up as well as investment and export activity. We also find that smaller EU economies do not specialise more than large ones in their exports as could perhaps be assumed.

Keywords: European Union, exports, extensive margin, growth, specialisation

Suggested Citation

Kaitila, Ville, Export Product Range and Economic Growth in the EU Countries (March 2019). The World Economy, Vol. 42, Issue 3, pp. 711-737, 2019, Available at SSRN: https://ssrn.com/abstract=3348009 or http://dx.doi.org/10.1111/twec.12715

Ville Kaitila (Contact Author)

ETLA, Research Institute of the Finnish Economy ( email )

Lonnrotink. 4 B
FIN-00120 Helsinki
Finland

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