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Proximity and Horizontal Policies: The Backbone of Export Diversification
Author:
Mr. Gonzalo Salinas
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 064
Language:
English
Publication Date:
05 Mar 2021
DOI:
https://doi.org/10.5089/9781513571614.001
ISBN:
9781513571614
ISSN:
1018-5941
Pages:
45
Keywords:
International trade; economic growth; economic development; export diversification; export complexity.; NHM export; export basket; target export category; concentration index; goods export; export concentration index; export country level; targeted export; policy variable; export group; Exports; Trade policy; Export performance; Trade liberalization; East Asia; Global; annex table; determinants of Economic Complexity Index; table A.1; front matter page; determinants of export
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The lack of a clear link between general economic fundamentals and export diversification indicators in the literature has fueled the believe that industrial policies are an absolute requisite to diversify exports. This paper, however, does find a strong statistical connection between horizontal policies and diversification by making two novel changes to traditional methodologies: using export categories that lead to diversification (for example, manufactures) as dependent variables, and using a gravity-equation regression setting. Proximity to other economies explains about a third of cross-country heterogeneity in targeted exports, and four fifths together with horizontal policies. Australia, Chile, and New Zealand emerge as new role models for diversification policies.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2021: Issue 064