Specialize Rightly or Decline

Alessia Lo Turco and Massimo Tamberi

No 305, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali

Abstract: Is exporting potato chips really the same than exporting microchips? Is the rate of economic growth independent on the export structure? Is moving toward dynamic sectors a key for economic growth? Our purpose is to determine whether and how the sectoral composition of exports aects countries growth. Dierently from Hausmann, Hwang and Rodrik (2006), we measure the nature of specialization as the average human capital content of countries' exports and we also propose the average world demand growth as an indicator to test whether demand apart from supply is relevant to growth. We finally test all these indexes in a panel data model of growth determinants finding a positive and significant relation between growth and the average skill content of countries' exports: a 1% increase in the average share of the human capital contained in exports causes the steady state real GDP per worker to grow of about 2%. Finally, there is slight evidence that moving towards export structures focused on moredynamic goods in terms of world demand growth helps growth too.

Keywords: economic growth; panel data; specialization (search for similar items in EconPapers)
JEL-codes: F43 O47 (search for similar items in EconPapers)
Pages: 30
Date: 2007-12
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (4)

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Chapter: Specialize Rightly or Decline (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wpaper:305

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