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Export diversification across countries and products: Do Eastern European (EE) and Commonwealth of Independent States (CIS) countries diversify enough?

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  • Oleksandr Shepotylo

Abstract

Despite the importance of geographical and product diversification of exports, this question has not got enough attention in the literature. We look at country and product diversification of exports from Eastern Europe (EE) and Commonwealth of Independent States (CIS), two groups of countries that both substantially increased trade openness since the beginning of transition, but took different paths in terms of product and geographical composition of exports, and compare with the export diversification predicted by the gravity equation estimated on a large sample of countries in 2001--2007. The results demonstrate substantial deviations of the actual diversification levels from the levels predicted by the gravity model for the CIS countries, while the EE countries' levels of diversification are much closer to the levels predicted by the model and consistent with the data. All CIS countries lag behind the region leaders -- Czech Republic and Poland -- in terms of the degree of export diversification. In particular, the CIS countries extensively engaged in the export of raw materials have the most concentrated exports in terms of their product composition. In terms of geographical diversification, Belarus has the least diversified exports among all transition countries.

Suggested Citation

  • Oleksandr Shepotylo, 2013. "Export diversification across countries and products: Do Eastern European (EE) and Commonwealth of Independent States (CIS) countries diversify enough?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(4), pages 605-638, June.
    • Handle: RePEc:taf:jitecd:v:22:y:2013:i:4:p:605-638
    DOI: 10.1080/09638199.2011.577797
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    1. Wang, Zhen Kun & Winters, L. Alan, 1991. "The Trading Potential of Eastern Europe," CEPR Discussion Papers 610, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Kiril I. Tochkov, 2018. "Trade Potential and Trade Integration of the Russian Far East: A Regional Perspective," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 4, pages 21-38.
    2. Aleksandra Parteka, 2013. "The evolving structure of Polish exports (1994−2010) – diversification of products and trade partners," Bank i Kredyt, Narodowy Bank Polski, vol. 44(5), pages 435-466.
    3. Gregory Yom Din, 2013. "Performance and profit sensitivity to risk: a practical evaluation of the agro-industrial projects developed by Israeli companies for the CIS and Eastern European countries," Demography, Springer;Population Association of America (PAA), vol. 1(1), pages 1-23, December.
    4. Gregory Yom Din, 2013. "Performance and profit sensitivity to risk: a practical evaluation of the agro-industrial projects developed by Israeli companies for the CIS and Eastern European countries," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 1(1), pages 1-23, December.
    5. Javed, Zanib & Munir, Kashif, 2016. "Impact of Export Composition on Economic Growth in South Asia," MPRA Paper 71519, University Library of Munich, Germany.
    6. Ignacio Rosal, 2018. "Power laws in EU country exports," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(2), pages 311-337, May.

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