Proximity and Horizontal Policies: The Backbone of Export Diversification

March 5, 2021

Preview Citation

Format: Chicago

Gonzalo Salinas. Proximity and Horizontal Policies: The Backbone of Export Diversification, (USA: International Monetary Fund, 2021) accessed December 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The lack of a clear link between general economic fundamentals and export diversification indicators in the literature has fueled the believe that industrial policies are an absolute requisite to diversify exports. This paper, however, does find a strong statistical connection between horizontal policies and diversification by making two novel changes to traditional methodologies: using export categories that lead to diversification (for example, manufactures) as dependent variables, and using a gravity-equation regression setting. Proximity to other economies explains about a third of cross-country heterogeneity in targeted exports, and four fifths together with horizontal policies. Australia, Chile, and New Zealand emerge as new role models for diversification policies.

Subject: Economic sectors, Export diversification, Export performance, Exports, Financial crises, International trade, Trade liberalization, Trade policy

Keywords: Annex table, Concentration index, Determinants of Economic Complexity Index, Determinants of export, East Asia, Economic development, Economic growth, Export basket, Export complexity., Export concentration index, Export country level, Export diversification, Export group, Export performance, Exports, Front matter page, Global, Goods export, International trade, NHM export, Policy variable, Table A.1, Target export category, Targeted export, Trade liberalization, Trade policy

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/064
Stock No:

WPIEA2021064
ISBN:

9781513571614
ISSN:

1018-5941

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