Explaining Trends and Factors Affecting Export Diversification in ASEAN and SAARC Regions: An Empirical Analysis

This paper examines the role played by country-specific factors in the determination of export product diversification process. To meet this objective, the paper begins by constructing a time series data for export diversification using the Herfindahl index. Then, it applies the fully modified OLS co-integration model to a panel of selected ASEAN and SAARC countries to find out the main determinants of export product diversification. Export diversification pattern shows that since the mid-1980s the ASEAN countries have continuously witnessed export diversification and the SAARC countries embarked on export diversification journey since the early 1990s. Analysis of the determinants suggests that foreign direct investment, domestic investment, competitiveness, real depreciation of domestic currency, financial sector development and institutional strength are significantly and positively related to export product diversification in both regions. These findings have important policy implications for the two regions. They call upon the policymakers for further diversification of exports, especially in the areas of their specialization that are vital for their smooth and sustained foreign exchange earnings as well as economic development. The study also recommends improving international competitive strength via improving business environment to achieve the goal of export product diversification.

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Services export diversification and services export revenue stability: does trade openness matter?

International Trade, Politics and Development ◽

10.1108/itpd-04-2020-0012 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Sena Kimm Gnangnon

Keyword(s):

Developing Countries ◽

International Trade ◽

Business Environment ◽

Product Diversification ◽

Export Diversification ◽

Content Type ◽

Policies And Measures ◽

Export Revenue ◽

Export Product ◽

Export Product Diversification

PurposeThe international trade literature has established that export product diversification lowers export product revenue instability. The current analysis investigates whether this finding carries over services exports.Design/methodology/approachThe empirical analysis covers a sample of 152 countries over the period 1980–2014 and employs the two-step system generalized method of moments (GMM) approach.FindingsThe empirical findings indicate that services export diversification reduces services export revenue instability both over the full sample as well as over sub-samples of high-income countries (HICs), least developed countries (LDCs) as well as developing countries (i.e. non-HICs) that are not LDCs. HICs appear to experience a higher positive effect of services export diversification on services export revenue instability than in developing countries. The analysis also shows that countries that further open-up to international trade enjoy a greater reducing effect of services export diversification on the instability of services export revenue.Research limitations/implicationsThis analysis, therefore, adds to the existing studies on the relationship between export product diversification and the instability of revenue derived from goods exports by focusing on the services export side. An important message from the analysis is that countries that diversify their services export basket enjoy lower services export revenue instability when they further integrate into the world trade market.Practical implicationsThis study highlights the importance of services export diversification, including for stabilizing services export revenue to services traders. Diversifying services export items, including across traditional and modern services sectors involves the implementation of a wide range of policies and measures, of which the liberalization of the services sectors through reduction and eventually the elimination of services trade barriers; the improvement of the business environment and the development of domestic financial markets (see for example, Hoekman, 2017). It could be interesting that another study consider policies and measures that could promote services export diversification.Originality/valueTo the best of the authors’ knowledge, this is the first time this topic is being addressed, including empirically.

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Export Diversification and Ecological Footprint: A Comparative Study on EKC Theory among Korea, Japan, and China

Sustainability ◽

10.3390/su10103657 ◽

2018 ◽

Vol 10 (10) ◽

pp. 3657 ◽

Cited By ~ 18

Author(s):

Hongbo Liu ◽

Hanho Kim ◽

Shuanglu Liang ◽

Oh-Sang Kwon

Keyword(s):

Economic Development ◽

Environmental Kuznets Curve ◽

Ecological Footprint ◽

Developed Countries ◽

Product Diversification ◽

Policy Implications ◽

Export Market ◽

Kuznets Curve ◽

Export Product ◽

Export Product Diversification

This study examines the Environmental Kuznets Curve (EKC) hypothesis by adopting a country’s ecological footprint as an indicator of environmental degradation in three East Asian countries: Japan, Korea, and China. During the development process, countries intend to balance between stabilizing export demand and maintaining sustainable economic improvement in the context of deteriorating global warming and climate change. The Environmental Kuznets Curve (henceforth, EKC) was originally developed to estimate the correlation between environment condition and economic development. In this paper, we started from the EKC model and adopted an Error Correction Methodology (henceforth, ECM) to estimate the EKC relationships in Japan, Korea (two developed countries), and China (a developing country) over the period of 1990 to 2013. Besides this, instead of only using Gross Domestic Product (henceforth, GDP), two subdivisions of trade diversification—export product diversification and export market diversification—are introduced as proxy variables for economic development in rectification of the EKC. The results demonstrate that both Korea and Japan satisfy the EKC theory by demonstrating an inverted U-shaped relationship between economic development and ecological footprint, while analysis based on data from China does not display the same tendency. For both export product diversification and market diversification, the more diversified the country’s export is, the bigger its ecological footprint. The policy implications of this econometric outcome are also discussed.

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Export Diversification and Financial Openness

10.20944/preprints202011.0288.v1 ◽

2020 ◽

Author(s):

Sena Kimm Gnangnon

Keyword(s):

Capita Income ◽

Product Diversification ◽

Empirical Literature ◽

Export Diversification ◽

Per Capita Income ◽

Financial Openness ◽

Generalized Methods Of Moments ◽

Per Capita ◽

Export Product ◽

Export Product Diversification

This paper investigates empirically the effect of export diversification (i.e., both export product diversification and services export diversification) on financial openness, using a sample of 119 countries (including both developed and developing countries) over the period 1985-2014. Based on the Blundell and Bond's two-step system Generalized Methods of Moments, the analysis has revealed that both export product diversification and services export diversification influence positively financial openness. However, this outcome hides differentiated effects across countries in the full sample. Specially, countries with a very high real per capita income experience a positive effect of export concentration on financial openness, while for countries with a relatively lower per capita income, it is rather export diversification that drives positively financial openness. Interestingly, the effect of export diversification on financial openness depends on the size of external shocks that affect domestic economies, as well as countries' economic growth performance. Overall, these findings add to the empirical literature on the effect of international trade on financial openness by showing that both export product diversification and services export diversification matter for financial openness.

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Multilateral Trade Liberalization and Democracy: Does Export Product Diversification Matter?

Journal of International Commerce Economics and Policy ◽

10.1142/s1793993321500022 ◽

2020 ◽

pp. 2150002

Author(s):

Sena Kimm Gnangnon

Keyword(s):

Trade Liberalization ◽

Product Diversification ◽

Policy Implications ◽

Multilateral Trade ◽

Resource Rents ◽

Natural Resource Rents ◽

Multilateral Trade Liberalization ◽

High Degree ◽

Export Product ◽

Export Product Diversification

This paper explores the effect of multilateral trade liberalization (MTP) on democracy, using a set of 148 countries over the period 1996–2016. In particular, it investigates whether this effect depends on countries’ level of export product concentration. The analysis shows that MTP promotes democracy only when it reaches a certain threshold. Furthermore, MTP promotes democracy in countries that enjoy a high degree of export product diversification, including away from primary products, or in those with low dependence on natural resource rents. These findings have important policy implications.

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Effect of multilateral trade liberalization on services export diversification

Journal of Economic Studies ◽

10.1108/jes-01-2021-0057 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Sena Kimm Gnangnon

Keyword(s):

Trade Liberalization ◽

Product Diversification ◽

Future Research ◽

Export Diversification ◽

Demand Side ◽

Content Type ◽

Multilateral Trade ◽

Multilateral Trade Liberalization ◽

Export Product ◽

Export Product Diversification

PurposeThis study investigates the effect of multilateral trade liberalization on services export diversification with a view to complementing the recently published work on the effect of multilateral trade liberalization on export product diversification.Design/methodology/approachThe empirical exercise been performed using a panel dataset of 133 countries over the period 1995–2014.FindingsThe findings show that multilateral trade liberalization is associated with greater services export diversification in both developed and developing countries alike. This is particularly the case in countries with a high reliance on manufactured goods exports or those that enjoy greater export product diversification. Interestingly, multilateral trade liberalization enhances services export diversification in countries that experience higher foreign direct investment inflows.Research limitations/implicationsThese findings highlight the importance of multilateral trade liberalization for services export diversification. The study has considered explicitly supply-side factors that could affect services export diversification. This is because the indicator of multilateral trade liberalization is highly correlated with some demand-side factors, such as the world demand for services exports. Therefore, another avenue for future research could involve looking at the demand side factors that could influence services export diversification, and whether the degree of multilateral trade liberalization matters for the influence of these demand factors on services export diversification.Practical implicationsThe current study through its positive effect on both export product diversification and services export diversification, greater cooperation among World Trade Organization (WTO) Members on trade matters could help revive economic growth, particularly in the current COVID-19 pandemic that has significantly plummeted it.Originality/valueTo the best of our knowledge, this is first study that has investigated this issue.

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Effect of Export Product Quality on Export Product Diversification at the Extensive Margins

Global Business & Economics Anthology ◽

10.47341/gbea.21034 ◽

2021 ◽

Vol 1 (1) ◽

Author(s):

Sèna GNANGNON

Keyword(s):

Product Quality ◽

Product Diversification ◽

Policy Implications ◽

Linear Effect ◽

Generalized Methods Of Moments ◽

Conclusion Section ◽

Methods Of Moments ◽

Export Product ◽

Export Product Diversification

This paper explores the effect of improvement in export product quality on export product diversification at the extensive margins. The analysis relies on a sample of 135 countries (both developed and developing countries) over the period 1970-2014. It uses the two-step system Generalized Methods of Moments (GMM) estimator to perform the empirical exercise. Results show the existence of a non-linear effect of export product quality on export product diversification at the extensive margins: improvement of export product quality in countries with low levels of export product quality leads to greater export product diversification at the extensive margins. However, countries with a high quality of export products experience greater export product concentration at the extensive margins. The SE findings have policy implications discussed in the conclusion section of the paper.

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Tax Reform, Trade Openness and Export Product Diversification in Developing Countries

CESifo Economic Studies ◽

10.1093/cesifo/ifaa011 ◽

2020 ◽

Author(s):

Sèna Kimm Gnangnon

Keyword(s):

Developing Countries ◽

Tax Reform ◽

Trade Openness ◽

Developed Countries ◽

Product Diversification ◽

Policy Implications ◽

Tax Structure ◽

Positive Effect ◽

Export Product ◽

Export Product Diversification

Abstract This article considers the effect of tax reform on export product diversification in developing countries, including through the trade openness channel. Tax reform involves the convergence of a developing country's tax structure towards the tax structure of developed countries. The analysis uses a sample of 112 developing countries over the period 1980–2014 and shows that tax reform exerts a positive effect on export product diversification, with least developed countries enjoying a higher positive effect than other countries in the full sample. Furthermore, the higher the degree of trade openness, the greater is the magnitude of the positive effect of tax reform on export product diversification. These outcomes have important policy implications.

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Fish Exports and Economic Growth: The Pakistan’s Experience

Global Business Review ◽

10.1177/0972150918825422 ◽

2019 ◽

Vol 20 (2) ◽

pp. 279-296 ◽

Cited By ~ 1

Author(s):

Syed Tehseen Jawaid ◽

Mohammad Haris Siddiqui ◽

Zeeshan Atiq ◽

Usman Azhar

Keyword(s):

Economic Growth ◽

Time Series Data ◽

Positive Impact ◽

Impulse Response Function ◽

Policy Implications ◽

Sensitivity Analyses ◽

Series Data ◽

Distributed Lag ◽

Long Run ◽

Short Run

This study attempts to explore first time ever the relationship between fish exports and economic growth of Pakistan by employing annual time series data for the period 1974–2013. Autoregressive distributed lag and Johansen and Juselius cointegration results confirm the existence of a positive long-run relationship among the variables. Further, the error correction model reveals that no immediate or short-run relationship exists between fish exports and economic growth. Different sensitivity analyses indicate that initial results are robust. Rolling window analysis has been applied to identify the yearly behaviour of fish exports, and it remains negative from 1979 to 1982, 1984 to 1988, 1993 to 1999, 2004 and from 2010 to 2013, and it shows positive impact from 1989 to 1992, 2000 to 2003 and from 2005 to 2009. Furthermore, the variance decomposition method and impulse response function suggest the bidirectional causal relationship between fish exports and economic growth. The findings are beneficial for policymakers in the area of export planning. This study also provides some policy implications in the final section.

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