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Structural Transformation and Quality Ladders: Solving the “Theil's Cube”

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  • Andrey A. Gnidchenko

    (National Research University Higher School of Economics)

Abstract

We propose a decomposition of weighted Theil index of export concentration into the quantity- and quality-driven terms and calculate the proposed components for 5038 product groups and 120 countries. We link our findings to the debate on the role of quality upgrading in structural transformation. The results do not support the idea that climbing quality ladders (or quality upgrading within the actually exported products) is the best way to proceed with structural transformation: for most countries, the share of the quality-driven component of weighted Theil index doesn’t exceed 20 per cent

Suggested Citation

  • Andrey A. Gnidchenko, 2019. "Structural Transformation and Quality Ladders: Solving the “Theil's Cube”," HSE Working papers WP BRP 218/EC/2019, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:218/ec/2019
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    References listed on IDEAS

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    More about this item

    Keywords

    structural transformation; diversification; international trade; Theil index; unit values; quality ladders.;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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