Export diversification and exchange-rate regimes: Evidences from 72 developing countries

Xiaohui Liu and Jing Zhang

MPRA Paper from University Library of Munich, Germany

Abstract: Drawing on a new dataset of diversification of export products, the paper makes the first attempt in the empirical literature to test the impact of product diversification on the choice of exchange-rate regimes in a sample of 72 developing countries (1974-2010). The paper finds that diversification of export products has a positive but insignificant effect on the choice of fixed exchange-rate regimes. When export diversification is decomposed into the extensive and intensive margins, evidences of the paper show that higher level of product diversification at the extensive margin has a statistically positive effect on exchange-rate regime choices while the intensive margin has a negative but insignificant impact on the choice.

Keywords: Export Diversification; Extensive Margin; Intensive Margin; The Choice of Exchange-rate Regime; Developing Countries (search for similar items in EconPapers)
JEL-codes: F30 F38 F40 (search for similar items in EconPapers)
Date: 2015-09-01
New Economics Papers: this item is included in nep-int and nep-opm
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Citations: View citations in EconPapers (1)

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