The Surprising Instability of Export Specializations

Diego Daruich, William Easterly and Ariell Reshef

No 22869, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the instability of hyper-specialization of exports. We have two main findings. (1) Specializations are surprisingly unstable: Export ranks are not persistent, and new top products and destinations replace old ones. Measurement error is unlikely to be the main or only determinant of this pattern. (2) Source-country factors are not the main explanation of this instability: Only 20% of the variation in export growth can be explained by variation in comparative advantage (source-by-product factors), while another 20% of the variation in export growth can be explained by variation in bilateral (source-by-destination) factors. The high share of product, destination, and product-by-destination factors, diminishes the emphasis on the nations where the exports originate. The high share of idiosyncratic variance (residual at the source-product-destination level of variation) of about 30%, also indicates the difficulty to predict export success using source country characteristics. These findings suggest that export performance depends, to a greater extent than previously appreciated, on forces that are outside the realm of national export promotion and industrial policies.

JEL-codes: F1 F14 F63 O1 O24 (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-int
Note: DEV
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Citations: View citations in EconPapers (7)

Published as Diego Daruich & William Easterly & Ariell Reshef, 2018. "The surprising instability of export specializations," Journal of Development Economics, .

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Related works:
Journal Article: The surprising instability of export specializations (2019)
Working Paper: The surprising instability of export specializations (2019)
Working Paper: The surprising instability of export specializations (2019)
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