EXPORT VARIETY, PRODUCTIVITY, AND COUNTRY SIZE IN A MULTI-GOOD RICARDIAN MODEL OF EXPORT DIVERSIFICATION

Andrzej Cieœlik () and Aleksandra Parteka
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Andrzej Cieœlik: University of Warsaw, Faculty of Economic Sciences, Department of Macroeconomics and International Trade, Warsaw, Poland
Authors registered in the RePEc Author Service: Andrzej Cieślik

No 52, GUT FME Working Paper Series A from Faculty of Management and Economics, Gdansk University of Technology

Abstract: This paper addresses the lack of connection between theory and empirics in most export diversification–economic development studies. We provide a Ricardian-based theoretical explanation of countries’ relative export variety as a function of the level of technology and country size assessed with respect to the rest of the world. Relative export diversification is an outcome of two forces: a relative productivity change (technological progress) and a relative country size change (labour force growth). The model predictions are confirmed in a sample of 132 countries (1988–2014), including 53 low-income countries, for which we measure export variety using product-level trade data. The influence of technology differences on export variety is: (i) stronger than is the effect of cross-country differences in size and (ii) non-linear, driving diversification at the beginning of the development process. The results are robust to the measurement of export variety, the inclusion of control variables, and estimation methods.

Keywords: export variety; export diversification; Ricardian model; economic development (search for similar items in EconPapers)
JEL-codes: F11 F14 F43 O11 O40 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (2)

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