Structural transformation and quality ladders: Evidence from the new Theil's decomposition

Andrey Gnidchenko

Structural Change and Economic Dynamics, 2021, vol. 59, issue C, 281-291

Abstract: This paper examines structural transformation along the development path by linking export concentration to economic development in a cross-country setting. I explore the role of widening product mix, export restructuring and quality upgrading for the patterns of export concentration measured by the weighted Theil index. This study contributes to the literature by developing the decomposition of this index into the extensive, quantitative and qualitative components. I find that structural transformation is primarily driven by export restructuring according to the world demand and towards the products with higher potential to improve quality. Controlling for the world demand, re-specialization is not pronounced at a high level of economic development, while the ability to upgrade quality becomes increasingly important for the higher-middle-income and high-income countries.

Keywords: Export concentration; Economic development; Theil index; Unit value (search for similar items in EconPapers)
JEL-codes: C43 F10 F14 L16 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:59:y:2021:i:c:p:281-291

DOI: 10.1016/j.strueco.2021.09.002

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