Overall Specialization and Income: Countries Diversity

Abstract:

This paper gives evidence to a stylized fact often disregarded in international trade empir-

ics: countries' diversification. In the last fifteen years, the growth of world trade coexisted

with the tendency of countries to reduce the specialization of their export composition

along the development path. On average, countries do not specialize, they diversify. Our

semiparametric empirical analysis shows how this result is robust to the use of different

statistical indexes used to measure trade specialization to the level of sectoral aggrega-

tion and to the level of smoothing in the nonparametric term associated to income per

capita. Using a General Additive Model (GAM) with country-specific fixed-effect, we show

that, controlling for countries heterogeneity, sectoral export diversification increases with

income.

Keywords: Nonparametrics; International Trade; Specialization (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2006-10, Revised 2008-10
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Forthcoming in The Review of World Economics, 1, 2009

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