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© 2022 International Monetary Fund
WP/22/214
IMF Working Paper
Middle East and Central Asia Department
Raising Armenia’s Export Potential
Prepared by Klakow Akepanidtaworn, Lili Karapetyan, Nathalie Reyes, and Yulia Ustyugova
Authorized for distribution by Nathan Porter
October 2022
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.
ABSTRACT: Raising Armenia’s long-term growth prospects is critical to meet the pressing need for jobs, achieve higher living standards, and arrest emigration. Armenia’s long-term growth prospects have weakened since the global COVID-19 crisis, while recent global and regional the geopolitical developments added new shocks. This paper argues that there is a need to boost the potential of the tradable sector by focusing on products with higher complexity to sustainably increase Armenia’s growth rate. It provides an overview of Armenia’s export performance, analyzes factors and policy valuables that affect export outcomes in terms of volumes and composition, and draws policy implications.
| JEL Classification Numbers: | F41, F13 |
| Keywords: | Empirical Studies of Trade; Trade Policy |
| Author’s E-Mail Address: | kakepanidtaworn@imf.org, lkarapetyan@imf.org, nreyes@imf.org, yustyugova@imf.org |
| JEL Classification Numbers: | F41, F13 |
| Keywords: | Empirical Studies of Trade; Trade Policy |
| Author’s E-Mail Address: | kakepanidtaworn@imf.org, lkarapetyan@imf.org, nreyes@imf.org, yustyugova@imf.org |
Title Page
WORKING PAPERS
Raising Armenia’s Export Potential
Prepared by Klakow Akepanidtaworn, Lili Karapetyan, Nathalie Reyes, and Yulia Ustyugova.1
Contents
I. Introduction
II. Armenia’s Export Performance
III. Data & Methodology
IV. Armenia’s Export Potential and its Determinants
V. Conclusion
Annex I. Unit Root Tests
References
FIGURES
Figure 1. Armenia’s Exports and Its Structure
Figure 2: Armenia’s Participation in Global Value Chains
Figure 3: Revealed Comparative Advantage
Figure 4: Armenia’s Economic Complexity
Figure 5: Armenia’s Export Characteristics
Figure 6: Export Complexity: Armenia and its Peers
Figure 7: Decomposition of Change in Export Composition
TABLES
Table 1: Global Market Shares, Export of Goods
Table 2. Global Market Shares, Export of Services
Table 3: Summary Statistics
Table 4. List of Countries in the Analysis
Table 5. Main Variables in the Analysis
Table 6: Gravity Estimates at a Country Level
Table 7. Export Performance Relative to the Model by Country
Table 8: Gravity Estimates at a sector level
Table 9. Export Potential by Country and Sector
Table 10. Determinants of the Exports of Goods Composition
Table 11. Determinants of the Exports of Services Composition
Table 12. Armenia Trade Agreements
“The author(s) would like to thank” footnote, as applicable.
We are grateful for insightful comments and suggestions from Nathan Porter, Moataz El Said, Faten Saliba, Kiichi Tokuoka, and Maria Atamanchuk. A shorter version of this paper was a Selected Issues Paper (IMF 21/274), Chapter 1, “Promoting Export-Led Growth.”