EconPapers    
Economics at your fingertips  
 

Cultural diversity and export sophistication

Zhaobin Fan, Sajid Anwar () and Shujuan Huang

International Review of Economics & Finance, 2018, vol. 58, issue C, 508-522

Abstract: By extending the Hausmann et al., (2007)'s theoretical model involving cost discovery, we show that cultural diversity affects export sophistication by increasing the degree of heterogeneity in the economy. Specifically, cultural diversity pushes the technology frontier of the economy outwards, which improves export sophistication level. Our theoretical results suggest that cultural diversity also increases the growth rate of export sophistication by improving the economy's ability to operate closer to its technology frontier. We use panel data that covers 85 countries over the 1995–2014 period to empirically evaluate our theoretical predictions. Pooled and random effects regression results show that cultural diversity and the degree of export sophistication are positively related and this association is statistically significant. However, fixed effects estimation results show that the impact of cultural diversity on growth rate of export sophistication is statistically insignificant. Finally, we find that the impact of cultural diversity on export sophistication does not vary significantly on an annual basis. However, over longer periods, this effect increases in size.

Keywords: Cultural diversity; Export sophistication; Technological progress; Panel data regression (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056017306378
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:58:y:2018:i:c:p:508-522

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-03-31
Handle: RePEc:eee:reveco:v:58:y:2018:i:c:p:508-522