EconPapers    
Economics at your fingertips  
 

Structural Transformation of Exports in a Product Space Model

Kristine Vitola and Gundars Davidsons
Additional contact information
Gundars Davidsons: Bank of Latvia

No 2008/04, Working Papers from Latvijas Banka

Abstract: The research paper deals with an export structural transformation model providing for a transition from the production and exports of goods with low value added to the production and exports of goods with high value added. It is essential for the improvement of a nation's welfare, as observations show that in a longer perspective the level of economic development is related to the degree of export sophistication. The speed of structural transformation depends on the distance in the product space between the potential export goods and the existing export goods with revealed comparative advantage. Estimations within the research suggest that the relative distance of Latvian export goods to goods with comparative advantage is rather small. Potential of almost all groups of currently produced goods to act as drivers of development has already been exhausted to a large extent. In order to enhance sophistication of Latvia's export structure, the production of goods with their implicit income level exceeding the current average weighted value of the export basket should be augmented. Potential goods for exports include pharmaceutical products, medical, precision and optical instruments as well as chemicals and chemical products. However, it is rather unlikely that comparative advantage in these products can be developed without extra supportive measures taken by the Government.

Keywords: structural transformation; comparative advantage; export sophistication (search for similar items in EconPapers)
JEL-codes: F14 F19 O33 O40 (search for similar items in EconPapers)
Date: 2008-05-10
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://www.bank.lv/public_files/images/img_lb/izd ... -4_vitola-davids.pdf (application/pdf)
https://www.macroeconomics.lv/sites/default/files/wp_2008-4_vitola-davids.pdf (application/pdf)

Related works:
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:ltv:wpaper:200804

Access Statistics for this paper

More papers in Working Papers from Latvijas Banka Contact information at EDIRC.
Bibliographic data for series maintained by Konstantins Benkovskis ().

 
Page updated 2020-07-03
Handle: RePEc:ltv:wpaper:200804