## _sdn1213 - Executive Summary

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---

### I. Introduction
- Many low-income countries (LICs) have limited diversification in exports and the broader economy, often concentrated in primary commodities with limited scope for productivity growth and quality upgrading.
- Consequences of limited diversification include:
  - Less broad-based and sustainable growth.
  - Increased exposure to adverse external shocks and macroeconomic instability.
- Diversification is central to structural transformation—reallocating resources from less productive to more productive sectors—and is particularly important for LICs with small domestic markets.
- Two main goals of the note:
  - Review and extend evidence that diversification is an important aspect of development, using trade and a new IMF domestic dataset.
  - Motivate further analytical work on how diversification affects macroeconomic stability and growth in LICs.
- Terminology/coverage:
  - Uses World Bank classification for LICs.
  - Focuses on "diversification spurts": rapid, sustained, significant spells of diversification.

### II. How Is Diversification Measured?
- Broad approach: Evaluate trade diversification and domestic sector diversification simultaneously to capture structural transformation.
- Dimensions of trade diversification:
  - Across products or trading partners.
  - Extensive margin (entry into new product lines) vs. intensive margin (more balanced mix of existing exports).
  - Product-quality upgrading (evidenced by higher prices for existing exports).
- Data sources and time coverage:
  - Main trade source: updated UN–NBER dataset harmonizing COMTRADE bilateral trade flow data at the 4-digit SITC (Rev. 1) level; analysis extends back to 1962.
  - Domestic-sector analysis uses existing and new datasets:
    - Value added for 28 manufacturing sectors during 1985–2010 (UNIDO, 3-digit ISIC).
    - Labor employment shares in 9 economy-wide sectors during 1969–2008 (ILO, 1-digit).
    - New IMF dataset: value added in 12 economy-wide sectors during 2000–2010 using IMF desk inputs (covers more than 50 LICs and MICs in Africa and East Asia and the Pacific).
- Diversification indices used:
  - Herfindahl index and Theil index.
  - Theil index advantage: decomposable into extensive and intensive margins.
  - Lower index values indicate higher diversification.

### III. Patterns of Diversification (Trade)
- Stylized relationship:
  - Higher per capita income is broadly associated with greater trade diversification up to advanced-economy status (GDP per capita of $25,000–$30,000).
  - This relationship holds in cross-sectional and time-series dimensions.
- Temporal patterns:
  - LICs’ diversification notably increased starting in the mid–1990s, with much progress via the extensive margin (entry into new products).
  - After 1995, LICs—and sub-Saharan Africa in particular—made significant progress diversifying exports across partners.
- Geographic shifts:
  - Trade shifted away from the European Union (EU) toward Asia, notably China.
  - Analysis explicitly documents a significant increase in exports to completely new partners post-1995.
- Key data/time references:
  - Trade dataset extends back to 1962.
  - Diversification surge observed around 1995.

### IV. Real-Sector Diversification
- Measurement challenges:
  - UNIDO output data: covers only agriculture and manufacturing, excludes services.
  - ILO employment data: often covers only a small workforce fraction, few LICs, and suffers quality issues for LICs.
- Response:
  - Construction of a new IMF dataset covering 12 economy-wide sectors for 2000–2010 for over 50 LICs and MICs in Africa and East Asia and the Pacific.
- Purpose:
  - Provide broader sectoral and LIC coverage to better capture domestic production structure and structural transformation.

### V. Quality Upgrading
- Development involves changes in quality levels of goods produced in addition to product mix; producing higher-quality varieties can boost export revenue potential.
- Agricultural and natural resources tend to have lower potential for quality upgrading than manufactures.
- For LICs at early stages, diversification into products with longer quality ladders may be a necessary step before large gains from quality improvement can be reaped.
- Quality proxied by unit values of exports calculated from the updated UN-NBER dataset; individual product unit values normalized by the world average and country-average unit values constructed as a geometric value-weighted mean of individual product unit values.
- Empirical relationships:
  - Higher incomes per capita are broadly associated with greater export quality at the country level; relationship stronger within manufacturing.
  - Sub-Saharan Africa stands out as producing relatively low quality goods; only since 2000 has there been some indication of quality upgrading in sub-Saharan Africa.
  - Within manufacturing, unit values appear to converge unconditionally to the world’s quality frontier, closing the gap at a speed of about 2 percent per year (Rodrik, 2011).

### VI. Case Studies and Stylized Lessons
- Countries considered: Tanzania, Bangladesh, Vietnam, Malaysia.
- Key comparative observations:
  - Tanzania:
    - Major increases in, and diversification of, output and exports since late 1990s.
    - Growth strong in mining, manufacturing, construction, and services.
    - Output concentration decreased; EU decreased in importance for exports while regional trade and trade with China and Switzerland increased.
  - Bangladesh:
    - Rapid shift toward ready-made garments triggered by external factors (MFA, generalized system of preferences).
    - Output diversification increased but has seemingly peaked.
    - Challenges: poor governance, scarce electricity, infrastructure bottlenecks, weak contract enforcement, and expensive credit.
  - Vietnam:
    - "Waves" of reforms (1980s and 1990s) sustained diversification.
    - Early reforms liberalized domestic prices and trade; later FDI liberalization integrated Vietnam into global supply chains and diversified from textiles to footwear and electronics.
    - Trade partners diversified from Soviet Union to Asia, then Europe and the United States.
  - Malaysia:
    - Manufacturing surged from 5 percent to almost 70 percent of merchandise exports since 1970.
    - Primary commodities accounted for about 70 percent of total exports during the 1960s.
    - Transformation underpinned by political stability, macroeconomic management, microeconomic deregulation, export promotion, and free trade zones.
    - More recently slower progress moving into new sectors or upgrading product quality.
- Export experimentation and extensive margin dynamics (1990–2011) differ across cases:
  - Malaysia: least growth over time in product varieties and greatest share of exports from incumbent varieties.
  - Vietnam: high probability of survival of new varieties and significant new entry.
  - Tanzania: less growth in varieties but surviving varieties grew more.
  - Bangladesh: less experimentation and less growth in surviving varieties, accounting for high concentration.

### VII. Key Empirical Findings
- Diversification and macroeconomic outcomes:
  - Increases in diversification have been associated with lower volatility and higher growth, especially since 1995 and in LICs with better institutions.
- Nonlinearity in development:
  - Evidence suggests higher incomes per capita are associated first with diversification, and then with reconcentration—implying the diversification process is inherently nonlinear.
- Role of the extensive margin:
  - Much of LICs’ progress in export diversification occurred through the extensive margin—entry into new products and new partners.
- Data importance:
  - The extended time dimension (1962 onward) is critical to confirming relationships between diversification and GDP per capita.

### VIII. Diversification and Macroeconomic Stability
- Diversification can act as buffer against external shocks by shifting resources from volatile, correlated sectors (mining, agriculture) to less volatile sectors (manufacturing).
- Geographic diversification reduces exposure to volatility transmitted from trading partners; beneficial effect is nonlinear and decreases as a country becomes more diversified.
- Empirical measures and findings:
  - Export diversification is associated with lower terms-of-trade volatility and lower output volatility.
  - Diversification spurts identified:
    - A total of 61 diversification spurts were identified in the post–1962 period, involving 51 developing countries.
    - Spurts occur more frequently in the 1960s and 1990s and are evenly distributed across regions (after controlling for relative number of countries).
    - Spurts last 13 years on average, rising to 20 years in the East Asia and Pacific region.
  - Diversification spurts are associated with reductions in output volatility:
    - 17 percent average reduction in volatility of output growth in developing countries.
    - 30 percent reduction in LICs.
    - 12 percent reduction in MICs.
- Industry diversification helped attenuate the impact of the global financial crisis (da Costa Neto and Romeu, 2011).

### IX. Growth through Diversification and Heterogeneity
- Initial diversification is on average positively associated with subsequent growth, but relationship displays much heterogeneity.
- Fast growers historically experienced more rapid diversification, especially clear in the post–1990 period.
- Within LICs, both output growth and trade diversification picked up sharply after 1990, but with significant cross-country differences; post–1990 growth more rapid in Fragile State LICs.
- Benchmarking LICs against countries when they first reached real GDP per capita of $1,200 shows benchmarking countries experienced faster growth and deeper diversification than LICs after 1990.
- Diversification spurts and growth accelerations are correlated:
  - Diversification spurts are associated with sharp subsequent growth accelerations, especially for non-fragile LICs.
  - Growth accelerations are associated with subsequent increases in diversification among non-fragile LICs.
- Potential impediments to successful diversification include:
  - Policy barriers, structural rigidities in labor and product markets, insufficient or low-quality public infrastructure, public-sector inefficiencies, and lack of financial development.

### X. Policy Implications and Directions for Further Work
- Need for further analytical work to inform policy on how diversification can enhance macroeconomic stability and resilience to shocks, and promote transition to higher, sustained growth.
- Policy cautions:
  - Diversification promotion should avoid risky and often counterproductive "picking winners."
- Recommended policy emphases:
  - General measures: macroeconomic stabilization; improving quantity and quality of infrastructure; essential business services; creating an environment for foreign investors.
  - Adaptive "waves" of measures aligned with evolving comparative advantages and external conditions.
- Diagnostic indicators for policy:
  - Frequency of new product introduction, survival rates of new varieties, and growth rates of surviving varieties can diagnose bottlenecks:
    - Low entry may indicate barriers deterring firms from exporting or experimenting.
    - Low survival rates may indicate greater obstacles than expected.
    - If surviving firms cannot expand, inadequate access to finance may be implicated.
- Research agenda priorities:
  - Deeper analysis of drivers and impediments of diversification in LICs.
  - Examination of the role of institutions and timing (post-1995 gains highlighted).
  - Integration of trade- and domestically-focused measures of diversification to design coherent macro-structural policies.
  - Analytical work to understand roles of weak institutions, labor and product market rigidities, public-sector inefficiencies, and financial development.

### XI. Key Quantitative Facts and Measures
- Trade dataset extends back to 1962.
- Diversification surge observed around 1995 and mid–1990s uptick for LICs.
- Examples of income levels and sectoral shares:
  - LICs with income per capita well below $1,000 (Tanzania and Bangladesh examples).
  - Malaysia: income per capita has grown five-fold over the past 40 years.
  - Malaysia manufacturing exports share rose from 5 percent to almost 70 percent of merchandise exports since 1970.
  - Primary commodities accounted for about 70 percent of total exports during the 1960s (Malaysia).
- Quality convergence:
  - Unit values converge to world quality frontier at a speed of about 2 percent per year (Rodrik, 2011).
- Diversification spurts:
  - 61 diversification spurts identified (post–1962), involving 51 developing countries.
  - Average spurt duration: 13 years (rising to 20 years in East Asia and Pacific).
  - Diversification spurts associated with a 17 percent average reduction in output growth volatility (30 percent in LICs; 12 percent in MICs).

*Source: IMF staff Executive Summary from the IMF Staff Discussion Note (Executive Summary), _sdn1213 - Executive Summary.*

### Executive Summary ......................................................................................................

### EXECUTIVE SUMMARY

### I. Introduction
- Many low-income countries (LICs) have limited diversification in exports and the broader economy, often concentrated in primary commodities with limited scope for productivity growth and quality upgrading.
- Consequences of limited diversification include:
  - Less broad-based and sustainable growth.
  - Increased exposure to adverse external shocks and macroeconomic instability.
- Diversification is central to structural transformation—reallocating resources from less productive to more productive sectors—and is particularly important for LICs with small domestic markets.
- Two main goals of the note:
  - Review and extend evidence that diversification is an important aspect of development, using trade and a new IMF domestic dataset.
  - Motivate further analytical work on how diversification affects macroeconomic stability and growth in LICs.
- Terminology/coverage:
  - Uses World Bank classification for LICs.
  - Focuses on "diversification spurts": rapid, sustained, significant spells of diversification.

### II. How Is Diversification Measured?
- Broad approach: Evaluate trade diversification and domestic sector diversification simultaneously to capture structural transformation.
- Dimensions of trade diversification:
  - Across products or trading partners.
  - Extensive margin (entry into new product lines) vs. intensive margin (more balanced mix of existing exports).
  - Product-quality upgrading (evidenced by higher prices for existing exports).
- Data sources and time coverage:
  - Main trade source: updated UN–NBER dataset harmonizing COMTRADE bilateral trade flow data at the 4-digit SITC (Rev. 1) level; analysis extends back to 1962 (vs. literature often post–1988).
  - Domestic-sector analysis uses existing and new datasets:
    - Value added for 28 manufacturing sectors during 1985–2010 (UNIDO, 3-digit ISIC).
    - Labor employment shares in 9 economy-wide sectors during 1969–2008 (ILO, 1-digit).
    - New IMF dataset: value added in 12 economy-wide sectors during 2000–2010 using IMF desk inputs (covers more than 50 LICs and MICs in Africa and East Asia and the Pacific).
- Diversification indices used:
  - Herfindahl index and Theil index.
  - Theil index advantage: decomposable into extensive and intensive margins.
  - Lower index values indicate higher diversification.

### III. Patterns of Diversification (Trade)
- Stylized relationship:
  - Higher per capita income is broadly associated with greater trade diversification up to advanced-economy status (GDP per capita of $25,000–$30,000).
  - This relationship holds in cross-sectional and time-series dimensions.
- Temporal patterns:
  - LICs’ diversification notably increased starting in the mid–1990s, with much progress via the extensive margin (entry into new products).
  - After 1995, LICs—and sub-Saharan Africa in particular—made significant progress diversifying exports across partners.
- Geographic shifts:
  - Trade shifted away from the European Union (EU) toward Asia, notably China.
  - Analysis explicitly documents a significant increase in exports to completely new partners post-1995.
- Key data/time references:
  - Trade dataset extends back to 1962.
  - Diversification surge observed around 1995.

### IV. Real-Sector Diversification
- Measurement challenges:
  - UNIDO output data: covers only agriculture and manufacturing, excludes services.
  - ILO employment data: often covers only a small workforce fraction, few LICs, and suffers quality issues for LICs.
- Response: construction of a new IMF dataset covering 12 economy-wide sectors for 2000–2010 for over 50 LICs and MICs in Africa and East Asia and the Pacific.
- Purpose: provide broader sectoral and LIC coverage to better capture domestic production structure and structural transformation.

### V. Key Empirical Findings
- Diversification and macroeconomic outcomes:
  - Increases in diversification have been associated with lower volatility and higher growth, especially since 1995 and in LICs with better institutions.
- Nonlinearity in development:
  - Evidence (citing Imbs and Wacziarg, 2003; Cadot and others, 2011) suggests higher incomes per capita are associated first with diversification, and then with reconcentration—implying the diversification process is inherently nonlinear.
- Role of the extensive margin:
  - Much of LICs’ progress in export diversification occurred through the extensive margin—entry into new products and new partners.
- Data importance:
  - The extended time dimension (1962 onward) is critical to confirming relationships between diversification and GDP per capita.

### VI. Analytical and Policy Implications
- Need for further analytical work:
  - To inform policy on how diversification can enhance macroeconomic stability and resilience to shocks, and promote transition to higher, sustained growth.
- Policy cautions:
  - Diversification promotion should avoid risky and often counterproductive "picking winners."
- Research agenda priorities:
  - Deeper analysis of drivers and impediments of diversification in LICs.
  - Examination of the role of institutions and timing (post-1995 gains highlighted).
  - Integration of trade- and domestically-focused measures of diversification to design coherent macro-structural policies.

*Source: IMF staff Executive Summary from the IMF Staff Discussion Note (Executive Summary), _sdn1213 - Executive Summary.*

### 2010. This new dataset again underpins the notion that, within developing countries, greater

### _sdn1213 - 2010. This new dataset again underpins the notion that, within developing countries, greater

### Diversification patterns and stylized facts
- Greater income per capita is associated with greater real-sector diversification (Figure 4).  
- During the 2000s, both sub-Saharan Africa and Asia witnessed significant diversification, although Asia started from a higher level.  
- Over the past decade the share of agriculture in output has declined significantly (result holds across all countries and in LICs alone).  
- The agricultural share has largely been replaced by nontradables such as construction, wholesale trade, and transportation, rather than by manufacturing (Figure 5).  
- Trade diversification increases as economies diversify production out of agriculture; relationship stronger for diversification in traded products than in trading partners (Figure 6).  

### Quality upgrading
- Development involves changes in quality levels of goods produced in addition to product mix; producing higher-quality varieties can boost export revenue potential.  
- Agricultural and natural resources tend to have lower potential for quality upgrading than manufactures.  
- For LICs at early stages, diversification into products with longer quality ladders may be a necessary step before large gains from quality improvement can be reaped.  
- Quality proxied by unit values of exports calculated from the updated UN-NBER dataset; individual product unit values normalized by the world average and country-average unit values constructed as a geometric value-weighted mean of individual product unit values.  
- Higher incomes per capita are broadly associated with greater export quality at the country level; relationship stronger within manufacturing.  
- Sub-Saharan Africa stands out as producing relatively low quality goods; only since 2000 has there been some indication of quality upgrading in sub-Saharan Africa.  
- Within manufacturing, unit values appear to converge unconditionally to the world’s quality frontier, closing the gap at a speed of about 2 percent per year (Rodrik, 2011).

### Case studies: Tanzania, Bangladesh, Vietnam, Malaysia — comparative lessons
- Countries considered include: Tanzania and Bangladesh (two LICs with income per capita well below $1,000); Vietnam (well on way to emerging market status); Malaysia (income per capita has grown five-fold over the past 40 years).  
- Tanzania: major increases in, and diversification of, output and exports since late 1990s; growth strong in mining, manufacturing, construction, and services; output concentration decreased; EU decreased in importance for exports while regional trade and trade with China and Switzerland increased.  
- Bangladesh: rapid shift toward ready-made garments triggered by external factors (MFA, generalized system of preferences); output diversification increased but has seemingly peaked; challenges include poor governance, scarce electricity, infrastructure bottlenecks, weak contract enforcement, and expensive credit.  
- Vietnam: "waves" of reforms (1980s and 1990s) sustained diversification; early reforms liberalized domestic prices and trade; later FDI liberalization helped integrate Vietnam into global supply chains and diversify from textiles to footwear and electronics; trade partners diversified from Soviet Union to Asia, then Europe and the United States.  
- Malaysia: manufacturing surged from 5 percent to almost 70 percent of merchandise exports since 1970; primary commodities accounted for about 70 percent of total exports during the 1960s; transformation underpinned by political stability, macroeconomic management, microeconomic deregulation, export promotion, and free trade zones; more recently slower progress moving into new sectors or upgrading product quality.  
- Export experimentation and extensive margin dynamics (1990–2011) differ across cases:
  - Malaysia showed the least growth over time in product varieties and greatest share of exports from incumbent varieties.  
  - Vietnam had high probability of survival of new varieties and significant new entry.  
  - Tanzania had less growth in varieties but surviving varieties grew more.  
  - Bangladesh had less experimentation and less growth in surviving varieties, accounting for high concentration.

### Diversification and macroeconomic stability
- Diversification can act as buffer against external shocks by shifting resources from volatile, correlated sectors (mining, agriculture) to less volatile sectors (manufacturing).  
- Geographic diversification reduces exposure to volatility transmitted from trading partners; beneficial effect is nonlinear and decreases as a country becomes more diversified.  
- Export diversification is associated with lower terms-of-trade volatility and lower output volatility (Figure 13); results hold after controlling for other determinants of output volatility.  
- Diversification spurts identified:
  - A total of 61 diversification spurts were identified in the post–1962 period, involving 51 developing countries.  
  - Spurts occur more frequently in the 1960s and 1990s and are evenly distributed across regions (after controlling for relative number of countries).  
  - Spurts last 13 years on average, rising to 20 years in the East Asia and Pacific region.  
- Diversification spurts are associated with reductions in output volatility:
  - 17 percent average reduction in volatility of output growth in developing countries.  
  - 30 percent reduction in LICs.  
  - 12 percent reduction in MICs.  
- Industry diversification helped attenuate the impact of the global financial crisis (da Costa Neto and Romeu, 2011).

### Growth through diversification and heterogeneity
- Initial diversification is on average positively associated with subsequent growth, but relationship displays much heterogeneity (Figure 16).  
- Fast growers historically experienced more rapid diversification, especially clear in the post–1990 period.  
- Within LICs, both output growth and trade diversification picked up sharply after 1990, but with significant cross-country differences; post–1990 growth more rapid in Fragile State LICs (Figure 17).  
- Benchmarking LICs against countries when they first reached real GDP per capita of $1,200 shows benchmarking countries experienced faster growth and deeper diversification than LICs after 1990 (Figure 18).  
- Diversification spurts and growth accelerations are correlated; diversification spurts are associated with sharp subsequent growth accelerations, especially for non-fragile LICs, and growth accelerations are associated with subsequent increases in diversification among non-fragile LICs (Figure 19).  
- Ongoing work focuses on how policy and institutional factors influence transitions to more diverse production structures; potential impediments include policy barriers, structural rigidities in labor and product markets, insufficient or low-quality public infrastructure, public-sector inefficiencies, and lack of financial development.

### Key quantitative facts and measures preserved from the chapter
- LICs with income per capita well below $1,000 (Tanzania and Bangladesh examples).  
- Malaysia: income per capita has grown five-fold over the past 40 years.  
- Malaysia manufacturing exports share rose from 5 percent to almost 70 percent of merchandise exports since 1970.  
- Primary commodities accounted for about 70 percent of total exports during the 1960s (Malaysia).  
- Unit values converge to world quality frontier at a speed of about 2 percent per year (Rodrik, 2011).  
- 61 diversification spurts identified (post–1962), involving 51 developing countries.  
- Average spurt duration: 13 years (rising to 20 years in East Asia and Pacific).  
- Diversification spurts associated with a 17 percent average reduction in output growth volatility (30 percent in LICs; 12 percent in MICs).

### Policy implications and directions for further work
- Policy advice should encompass strategies to increase the likelihood of successful diversification, recognizing that one size may not fit all.  
- Effective measures are often general in scope (e.g., macroeconomic stabilization, improving quantity and quality of infrastructure, essential business services, creating environment for foreign investors) and may come in "waves" adapted to evolving comparative advantages and external conditions.  
- Industry-focused and narrowly targeted measures’ historical effectiveness remains an open issue.  
- Frequency of new product introduction, survival rates of new varieties, and growth rates of surviving varieties provide diagnostics for policy-driven bottlenecks:
  - Low entry may indicate barriers deterring firms from exporting or experimenting.  
  - Low survival rates may indicate greater obstacles than expected.  
  - If surviving firms cannot expand, inadequate access to finance may be implicated.  
- Analytical work underway to better understand the roles of weak institutions, labor and product market rigidities, public-sector inefficiencies, and financial development in affecting diversification and structural transformation, with special value to LICs with relatively poor post–1990 performance.

*Italic: Source: IMF internal data; IMF staff calculations; chapter content from the supplied PDF content unit.*

### REFERENCES

### _sdn1213 - REFERENCES

### References

- Acemoglu, D., and J. Robinson, 2012, Why Nations Fail (New York: Crown Publishers).
- Asmundson, I., 2012, ―More World Trade Flows: An Updated Dataset‖ (forthcoming; Washington: International Monetary Fund).
- Berg, A., J. Ostry, and J. Zettelmeyer, 2012, ―What Makes Growth Sustained?‖ Journal of Development Economics, Vol. 98, No. 2, pp. 149–66.
- Cadot, O., C. Carrere, and V. Strauss-Kahn, 2011, ―Export Diversification: What‘s Behind the Hump?‖ Review of Economics and Statistic, Vol. 93, pp. 590–605.
- Da Costa Neto, N., and R. Romeu, 2011, ―Did Export Diversification Soften the Impact of the Global Financial Crisis?‖ IMF Working Paper 11/99 (Washington: International Monetary Fund).
- Farshbaf, A., 2012, ―Does Geographical Diversification in International Trade Reduce Business Cycle Volatility?‖ (mimeo; California: University of Southern California).
- Gaertner, M., and C. Papageorgiou, 2011, ―Sustaining Tanzania‘s High Growth Path Through Exports‖ (mimeo; Washington: International Monetary Fund).
- Hallak, J.C., 2006, ―Product Quality and the Direction of Trade,‖ Journal of International Economics, Vol. 68, pp. 238–65.
- Imbs, J., and R. Wacziarg, 2003, ―Stages of Diversification,‖ American Economic Review Vol. 93, pp. 63–86.
- International Labour Organization (ILO), 2011, Yearbook of Labor Statistics.
- International Monetary Fund (IMF), 2011, Regional Economic Outlook: Sub-Saharan Africa, ―The East African Community: Taking Off?‖ (April; Washington: International Monetary Fund).
- _____, 2012, Regional Economic Outlook: Sub-Saharan Africa, ―Structural Transformation in Sub-Saharan Africa,‖ (October; Washington: International Monetary Fund).
- Jansen, M., C. Lennon, and R. Piermartini, 2009, ―Exposure to External Country Specific Shocks and Income Volatility,‖ World Trade Organization Staff Working Paper ERSD-2009-04.
- Khandelwal, A., 2010, ―The Long and Short (of) Quality Ladders,‖ Review of Economic Studies, Vol. 77, pp. 1450–76.
- Koren, M., and S. Tenreyro, 2007, ―Volatility and Development,‖ Quarterly Journal of Economics, Vol. 122, pp. 243–87.
- Lederman, D., and W. Maloney, 2012, Does what you export matter? In search of Empirical Guidance for Industrial Policies (Washington: World Bank).
- Lin, J.Y., 2012, The Quest for Prosperity: How Developing Economies Can Take Off (Princeton, New Jersey: Princeton University Press).
- Lowe, M., C. Papageorgiou, and F. Perez-Sebastian, 2012, ―Public and Private MPK‖ (draft working paper; Washington: International Monetary Fund).
- McMillan, M., and D. Rodrik, 2011, ―Globalization, Structural Change and Productivity Growth,‖ NBER Working Paper No. 17143 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Mobarak, A.M., 2005, ―Democracy, Volatility, and Economic Development,‖ Review of Economics and Statistics, Vol. 87, pp. 348–61.
- Moore, W., and C. Walkes, 2010, ―Does Industrial Concentration Impact on the Relationship between Policies and Volatility?‖ International Review of Applied Economics, Vol. 24, pp. 179–202.
- Ndulu, S., R. O‘Connell, H. Bates, P. Collier, and C. Soludo, 2007, The Political Economy of Economic Growth in Africa, 1960-2000 (Cambridge, Massachusetts: Cambridge University Press).
- Rodrik, D., 2011, ―Unconditional Convergence,‖ NBER Working Paper No. 17546 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Samake, I., and Y. Yang, 2011, ―Low-Income Countries‘ BRIC Linkage: Are There Growth Spillovers?‖ IMF Working Paper 11/267 (Washington: International Monetary Fund).
- Schott, P., 2004, ―Across-Product versus Within-Product Specialization in International Trade,‖ Quarterly Journal of Economics, Vol. 119, pp. 647–78.
- Singer, H., 1950, ―US Foreign Investment in Underdeveloped Areas: The Distribution of Gains between Investing and Borrowing Countries,‖ American Economic Review, Vol. 40, pp. 473–85.
- United Nations Industrial Development Organization (UNIDO), 2011, Industrial Statistics Database.

*Source: _sdn1213 - REFERENCES*

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