Does Export Upgrading Really Matter to Economic Growth? Evidence From Panel Data for High-, Middle-, and Low-Income Countries

Chakroun, M, Chrid, N, Saafi, S. Does export upgrading really matter to economic growth? Evidence from panel data for high‐, middle‐ and low‐income countries. Int J Fin Econ. 2020; 1– 26. https://doi.org/10.1002/ijfe.2082

33 Pages Posted: 21 Dec 2020

See all articles by Mohamed Chakroun

Mohamed Chakroun

German University of Technology

Naima Chrid

affiliation not provided to SSRN

Sami Saafi

University of Sousse

Date Written: October 1, 2020

Abstract

The main objective of this study is to examine the long-run relationship between export upgrading and economic growth for 67 countries over the period of 1984–2013. For this purpose, a panel cointegration framework that allows to control for parameters heterogeneity, cross-sectional dependence and non-stationarity has been deployed. Empirical results yield evidence of a positive and significant effect of export upgrading on economic growth for the full-sample and high-income panels, while this effect is negative and significant for low-income countries and insignificant for middle-income countries. Particularly, our findings show evidence of an inverted U-shaped relationship for the global and high-income panels. However, for low-income countries relationship between export complexity and economic growth was found to be U-shaped. These results are robust to several robustness checks and have important policy implications. In developed countries, excessive export complexity may be job-destructive and thereby threatens long-run growth and prosperity. For non-developed countries, exports diversification should be prioritized during the first stages of development. Industrial upgrading should not be considered as a strategic economic policy before the economy reaches a minimum level of maturity.

Suggested Citation

Chakroun, Mohamed and Chrid, Naima and Saafi, Sami, Does Export Upgrading Really Matter to Economic Growth? Evidence From Panel Data for High-, Middle-, and Low-Income Countries (October 1, 2020). Chakroun, M, Chrid, N, Saafi, S. Does export upgrading really matter to economic growth? Evidence from panel data for high‐, middle‐ and low‐income countries. Int J Fin Econ. 2020; 1– 26. https://doi.org/10.1002/ijfe.2082, Available at SSRN: https://ssrn.com/abstract=3717430 or http://dx.doi.org/10.2139/ssrn.3717430

Mohamed Chakroun (Contact Author)

German University of Technology ( email )

Naima Chrid

affiliation not provided to SSRN

Sami Saafi

University of Sousse ( email )

rue Abdelaziz el Behi
Sousse, Sousse 4000
Tunisia

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