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Decomposing world export growth and the relevance of new destinations

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  • Zahler, Andrés

Abstract

Looking to understand what drives countries' export growth in practice, I provide a decomposition of world export growth at the product variety level between new destinations, new products, and growth in value of old varieties. New destinations play a significant role, accounting for 37 percent of the growth in developing countries. By comparison, entry into new product categories -a margin that has received considerable attention- explains just 7 percent of export growth. Exploring the nature of destination expansion reveals it is neither automatic nor permanent. Even relatively competitive sectors face difficulties penetrating new destinations, and these difficulties are negatively correlated with population size and GDP per capita. Consistent with pervasive experimentation and failure, more than a third of all products in new destinations exported only once to a destination in the sixteen years studied.

Suggested Citation

  • Zahler, Andrés, 2007. "Decomposing world export growth and the relevance of new destinations," MPRA Paper 30295, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:30295
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    Cited by:

    1. Wagner, Rodrigo & Zahler, Andrés, 2015. "New exports from emerging markets: Do followers benefit from pioneers?," Journal of Development Economics, Elsevier, vol. 114(C), pages 203-223.
    2. Jaud, Melise & Cadot, Olivier & Disdier, Anne-Célia & Suwa-Eisenmann, Akiko, 2024. "Big hits in export growth," Journal of Development Economics, Elsevier, vol. 170(C).
    3. Türkcan, Kemal, 2014. "Exports Margins in Austria’s Export Growth," MPRA Paper 53085, University Library of Munich, Germany.
    4. Bahar, Dany & Hausmann, Ricardo & Hidalgo, Cesar A., 2014. "Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion?," Journal of International Economics, Elsevier, vol. 92(1), pages 111-123.
    5. Xuqian Hu & Canfei He, 2020. "Nontariff measures, trade deflection, and market expansion of exporters in China," Growth and Change, Wiley Blackwell, vol. 51(3), pages 932-953, September.

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    More about this item

    Keywords

    International trade; export growth; destinations; export growth decomposition; extensive margin;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other

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