Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
962510 | Journal of International Economics | 2013 | 14 Pages |
Abstract
This paper studies how a country's export diversification varies across destination markets. It develops an extension of the Romalis (2004) model which yields two testable predictions. According to the first, exports between similarly endowed countries (“South-South” and “North-North”) are more diversified than exports between differently endowed countries (“South-North” and “North-South”). The second implication is that, for given countries' production patterns, low bilateral trade costs lead to greater export diversification. These predictions find empirical support in a panel of 102 trade partners and 4998 HS-6 industries over the period 1995-2007. Results show that similarities between trading partners in physical capital, land and human capital endowments per worker are associated with more diversified bilateral exports. Exports are also more diversified when bilateral trade costs are relatively low.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Julie Regolo,