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The Birth and Growth of New Export Clusters: Which Mechanisms Drive Diversification?

Dany Bahar (), Rodrigo Wagner, Ernesto Stein and Samuel Rosenow

No 86a, CID Working Papers from Center for International Development at Harvard University

Abstract: Export diversification is associated with economic growth and development. Our paper explores competing mechanisms that mediate the emergence and growth of export products based on their economic relatedness to pre-existing exports. Our innovation is to simultaneously consider supply factors like labor, sourcing and technology; as well as demand factors like industry specific customer-linkages in a global setting. We find that, while technology and workforce similarity explain emergence and growth, pre-existing downstream industries remain a robust predictor of diversification, especially for jump starting new exports in developing countries. Our global stylized fact generalizes Javorcik’s (2004) view that spillovers are more likely in backward linkages.

Keywords: comparative advantage; exports; relatedness; spillovers; R&D; patents; labor; upstream; downstream (search for similar items in EconPapers)
JEL-codes: O14 O33 F14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ino and nep-int
Date: 2017-09
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