Income volatility: whom you trade with matters

Marion Jansen (), Carolina Lennon () and Roberta Piermartini
Additional contact information
Marion Jansen: International Trade Centre
Carolina Lennon: World Bank

Review of World Economics (Weltwirtschaftliches Archiv), 2016, vol. 152, issue 1, No 7, 127-146

Abstract: Abstract Using a dataset of 165 countries over a period from 1971 to 2010, this paper studies how income volatility abroad affects income volatility at home. Relying on the Markowitz–Tobin definition of portfolio risk to international trade, we disentangle how volatility at home depends on volatility in individual trading partners and on the correlation among trading partners’ business cycles. As it has to be expected when entry new markets yields costs, we find that the correlation among trading partners’ business cycles matters more than the volatility of individual trading partners. These findings can provide useful guidance for export promotion strategies.

Keywords: Income volatility; Geographical export diversification; Openness (search for similar items in EconPapers)
JEL-codes: C23 F43 O19 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10290-015-0238-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Journal Article: Income volatility: whom you trade with matters (2016)
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:spr:weltar:v:152:y:2016:i:1:d:10.1007_s10290-015-0238-5

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-015-0238-5

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().