More documents from Herzer, Dierk; Nowak-Lehmann D., Felicitas
More documents from Applied Economics

Export to your Reference Manger

Please Copy & Paste



Bookmark and Share

What Does Export Diversification Do For Growth? An Econometric Analysis

[journal article]

Herzer, Dierk; Nowak-Lehmann D., Felicitas

fulltextDownloadDownload full text

(860 KByte)

Citation Suggestion

Please use the following Persistent Identifier (PID) to cite this document:

Further Details
Abstract It is frequently suggested that export diversification contributes to an acceleration of growth in developing countries. Horizontal export diversification into completely new export sectors may generate positive externalities on the rest of the economy as export oriented sectors gain from dynamic learning activities due to contacts to foreign purchasers and exposure to international competition. Vertical diversification out of primary into manufactured exports is also associated with growth since primary export sectors prevalently do not exhibit strong spillovers. Yet there have been remarkably few empirical investigations into the link between export diversification and growth. This paper attempts to examine the hypothesis that export diversification is linked to economic growth via externalities of learning-by-doing and learning-by-exporting fostered by competition in world markets. The diversification-led growth hypothesis is tested by estimating an augmented Cobb-Douglas production function on the basis of annual time series data from Chile. Based on the theory of cointegration three types of statistical methodologies are used: the Johansen trace-test, a multivariate error-correction model and the dynamic OLS procedure. Given structural changes in the Chilean economy, time series techniques considering structural breaks are applied. The estimation results suggest that export diversification plays an important role in economic growth.
Document language English
Publication Year 2006
Page/Pages p. 1825-1838
Journal Applied Economics, 38 (2006) 15
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)