TRADE POLICY SPACE AND EXPORT PRODUCT DIVERSIFICATION

Sèna Kimm Gnangnon ()
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Sèna Kimm Gnangnon: World Trade Organization, Rue de Lausanne 154, CH-1211 Geneva 21, Switzerland

The Singapore Economic Review (SER), 2020, vol. 65, issue 06, 1727-1752

Abstract: This paper provides a quantitative measure of the concept of trade policy space, at the macroeconomic level, and examines its impact on export product diversification. Trade policy space has been defined as the room of manoeuvre available to a government once its current trade policy is depurated from the impact of structural domestic and international factors. The analysis has been carried out using an unbalanced panel dataset comprising 165 countries (both developed and developing countries) over the period 2002–2015. Results suggest that trade policy space is positively associated with export product diversification, and the higher countries’ development level, the greater is the magnitude of the positive effect of trade policy space on export product diversification. The analysis further shows for recipient-countries of Aid for Trade (AfT) flows that trade policy space is complementary with AfT inflows in inducing export product diversification. In particular, the higher the amounts of AfT inflows that accrue to these countries, the greater is the positive impact of trade policy space on export product diversification in AfT recipient-countries.

Keywords: Trade policy space; aid for trade; export product diversification (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S0217590820500575

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