Export growth drivers and economic development

Jesse Mora () and Michael Olabisi ()
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Jesse Mora: Occidental College

Empirical Economics, 2022, vol. 63, issue 5, No 3, 2389-2426

Abstract: Abstract We offer a new approach that explains long-run export growth, and how export growth varies by economic development. The approach relies on a heterogeneous-firm model that parses drivers of export growth along the following dimensions: comparative advantage changes, product demand growth, country-level growth, global growth, and growth in destinations reached. We show that aggregate trade growth for a product is a stronger driver of exports in the same product heading for high-income countries, but is less so for middle-income and low-income countries. Country-level export drivers explain more of export growth at the product-level in middle-income countries, compared to other country-groups. High-income countries appear to benefit more from secular trade growth trends, though the latter results are not as statistically robust. Finally, having more destinations is the most notable driver of the observed export growth in our analysis. Low-income countries appear to benefit the most from entering new markets. The main findings hold up to several robustness checks.

Keywords: Development; Margins of trade (search for similar items in EconPapers)
JEL-codes: F14 O11 O47 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00181-022-02204-w

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