Import diversification along the growth path

We provide evidence showing that the degree of diversification of import sources of finely disaggregated commodities rises monotonically along the growth path. This result is robust to different measures of import diversification and the inclusion of a large set of additional control variables. In addition, we show the process of rising import diversification takes place as countries gradually increase their spending shares in imports originating from relatively distant exporters.

► We measure diversification of import sources using the Gini and Herfindahl index. ► Diversification of import sources rises monotonically along the growth path. ► Import diversification takes place as countries gradually shift spending towards more distant exporters.