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Export Variety, Productivity, And Country Size In A Multi-Good Ricardian Model Of Export Diversification

Author

Listed:
  • Andrzej Cieœlik

    (University of Warsaw, Faculty of Economic Sciences, Department of Macroeconomics and International Trade, Warsaw, Poland)

  • Aleksandra Parteka

    (Gdansk University of Technology, Gdansk, Poland)

Abstract

This paper addresses the lack of connection between theory and empirics in most export diversification–economic development studies. We provide a Ricardian-based theoretical explanation of countries’ relative export variety as a function of the level of technology and country size assessed with respect to the rest of the world. Relative export diversification is an outcome of two forces: a relative productivity change (technological progress) and a relative country size change (labour force growth). The model predictions are confirmed in a sample of 132 countries (1988–2014), including 53 low-income countries, for which we measure export variety using product-level trade data. The influence of technology differences on export variety is: (i) stronger than is the effect of cross-country differences in size and (ii) non-linear, driving diversification at the beginning of the development process. The results are robust to the measurement of export variety, the inclusion of control variables, and estimation methods.

Suggested Citation

  • Andrzej Cieœlik & Aleksandra Parteka, 2018. "Export Variety, Productivity, And Country Size In A Multi-Good Ricardian Model Of Export Diversification," GUT FME Working Paper Series A 52, Faculty of Management and Economics, Gdansk University of Technology.
    • Handle: RePEc:gdk:wpaper:52
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    Cited by:

    1. Parteka, Aleksandra, 2020. "What drives cross-country differences in export variety? A bilateral panel approach," Economic Modelling, Elsevier, vol. 92(C), pages 48-56.
    2. Devran Sanli & Aziz Konukman, 2022. "An Empirical Analysis of Product Concentration and Income in High-Technology Exports," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(36), pages 153-185, June.

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    More about this item

    Keywords

    export variety; export diversification; Ricardian model; economic development;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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