## 1990. Service exports growth in developing countries has been higher than in advanced economies, albeit from a low base.

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### Services exports and recent patterns
- Services exports accounted for 15 percent of total exports in EMs.
- India:
  - Share of services exports in total exports increased rapidly over the last decade to 35 percent, higher than the average in advanced economies.
  - Modern services (finance; computer and information; royalties and license fees; and other business services) account for nearly 70 percent of the total commercial services exports (compared to around 35 percent in EMs).
  - Computer service exports account for almost 70 percent of total service exports.
  - Other important service components: finance, travel, sea transport (freight), and business services (legal, accounting, management, public relations, architecture, engineering, technical services).

### Evolution of goods exports
- Manufacturing trends:
  - China: manufacturing exports accounted for 90 percent of total exports in 2013 (almost double the share during 1980-85).
  - India: share of manufacturing in total merchandise exports increased to 57 percent in 2013 from 41 percent in 1980.
- Primary and resource-based dependence:
  - Primary products account for almost 40 percent of India’s merchandise exports.
  - Key agricultural primary exports: cotton, rice, tea, bovine meat, spices.
  - Key resource exports: precious stones and iron ore.
- Composition within manufactured exports:
  - Manufactured machinery accounts for almost 10 percent of India’s merchandise exports.
  - Textile and garments account for more than 15 percent.
- Technological intensity:
  - Share of high-tech and medium-tech manufacturing exports in total manufacturing exports has increased globally, particularly in China.
  - India shifted away from textiles, gems, leather toward high-tech and medium-tech products (engineering goods), but the share of high-tech and medium-tech manufacturing exports in total goods exports remains substantially lower than China and other EMs.
  - Resource-based production and low-tech manufacturing still dominate India’s goods export basket.

### Direction of India’s exports (geographic shifts)
- Share of exports to the EU and the USA fell to around 29 percent in 2013 from over 45 percent in 2000.
- East Asia and the Middle East emerged as the top two destinations.
- South-South trade:
  - Share of exports to emerging and developing countries is more than half of India’s merchandise exports, growing over 10 percentage points over the last decade.
  - Share of Middle East and North Africa (MENA) has grown over 5 percentage points over the last decade to over 20 percent of India’s total merchandise export.
  - Emerging Asia accounts for almost 20 percent of India’s merchandise trade.

### Diversification of exports
- Aggregate diversification:
  - India has increasingly diversified its merchandise exports over the last three decades (Herfindahl Index decline).
  - Services exports have also become more diversified over time, though service export diversification remains relatively low compared to peer EMs.
- By technological intensity:
  - Increased diversification of primary, resource-based and hi-technology manufacturing exports.
  - Some concentration remains in low- and medium-tech manufacturing.

### Quality, sophistication, and complexity of exports
- Quality:
  - Mean product quality of Indian exports has steadily increased over the last few decades.
  - Selected exports (diamonds, nuclear reactors, tin and alloys) show better quality than peer EMs; on most other goods India fares worse than peers.
- Sophistication (PRODY / EXPY framework):
  - Indian services exports are highly sophisticated—dominated by modern services—and are more sophisticated than the average level of high-income countries.
  - Telecommunications, computer and information services compose almost half of India’s commercial service export basket.
  - Indian goods export sophistication remains low relative to comparator Asian economies, and much lower than China’s and Brazil’s.
- Economic Complexity Index (ECI):
  - India ranks 54 out of 144 countries on the ECI.
  - India ranks higher than Brazil and South Africa but below peer-EMs and China.
  - India is a non-ubiquitous, diversified merchandise exporter.
- Service complexity and ubiquity:
  - Several freight-based transport exports, advertising, marketing, research services are highly connected to the rest of the economy.
  - India falls in the quadrant of relatively non-diversified countries exporting exclusive services (high-value computer exports dominate).

### Revealed Comparative Advantage (RCA) and export categories
- RCA-based classification of India’s export products (goods):
  - Classic products (RCA in both 1990-94 and 2007-11): account for over 60 percent of India’s export basket; average income level associated: 11,734; out of 129 classic products, 38 are income enhancing (PRODY > EXPY).
  - Disappearing products (had RCA at start but not at end): account for almost 4 percent of export basket; average income level approximately 12,225.
  - Emerging products (gained RCA recently): account for almost 10 percent of export value; average income level 12,673; out of 37 emerging products, 40 percent are income enhancing.
  - Marginal products (never had RCA): make up slightly over 25 percent of export basket; average income level almost 19,000; out of 573 marginal products, over 60 percent are income enhancing and belong mostly to medium- and high-tech manufacturing.
- Overall scope:
  - India’s comparative advantage covers less than 20 percent of potential resource and manufactured products (implying potential in about 80 percent of products).
  - India exports only 70 percent of potential tradable services (implying scope to diversify services).

### Product space analysis and implications for diversification
- Product space concepts:
  - Path: sum of proximities of a product to all other products (products with high path are central/core).
  - Density: closeness of a product to a country’s existing export structure (higher density implies higher probability of developing RCA).
- Empirical observations for India:
  - Number of products with comparative advantage increased between 1995 and 2012; core has become more populated.
  - India’s product space shows a core (metal products, machinery, chemicals) and a periphery (fishing, tropical and cereal agriculture).
  - Tradeoff: goods that are close to India’s current export basket tend to be less sophisticated; high income-potential goods are often further away.
  - Emerging products offer promising opportunities: several emerging products have high connectivity to other high-value, complex products.

### Key service export statistics (2007-13, BPM6 working data)
- Computer services:
  - Export value: 54,000 (current US$)
  - Share in export basket: 45.00 percent
  - Share of world service exports: 33.88 percent
  - PRODY: 18,476
  - path: 0.17
  - density: 0.19
  - ubiquity: 8.45
- Travel, Personal, Other:
  - Export value: 14,000
  - Share in export basket: 11.67 percent
  - Share of world service exports: 3.41 percent
  - PRODY: 6,115
  - path: 0.22
  - density: 0.19
  - ubiquity: 6.69
- Other Business Technical, trade-related, and other business:
  - Export value: 12,000
  - Share in export basket: 10.00 percent
  - Share of world service exports: 2.18 percent
  - PRODY: 12,524
  - path: 0.17
  - density: 0.25
  - ubiquity: 6.09
- Other notable service items reported in the source (examples preserved in source tables):
  - Other Business Professional and management consulting: export value 9,900; PRODY 14,501; share 8.25 percent.

### Implications and policy recommendations (What Needs to be Done)
- Raise value and quality of manufacturing exports, especially high-tech and medium-tech goods:
  - Building on emerging products (40 percent of total emerging products are income enhancing) and rediscovering comparative advantage in disappearing products can bolster export earnings.
  - Diversifying into income-enhancing marginal products (aircraft, machinery, motor vehicles, auto parts, rail construction, heterocyclic compounds) could substantially raise export income.
- Diversify and deepen services exports:
  - Leverage comparative advantage in high-value services to discover niches in services that feed manufacturing supply chains (e.g., R&D, design, engineering, IT).
  - India’s emerging comparative advantage in Research and Development Services is comparable to advanced economies; an ecosystem of risk-based capital and support from banking and financial sectors to scale young firms is critical.
- Pursue quality upgrading and move into central, high-PRODY products:
  - Several niche sectors show capabilities that can be leveraged for higher-volume, higher-value exports.
- Expand export destinations:
  - Further diversify geographic destinations—greater trade complementarity with East Asia has grown (17 percent in 1990 to 32 percent in 2008).
  - Substantial potential to expand trade with South Asia and regions such as Central Asia, Eastern Europe, Latin America, and Africa.
- Address domestic constraints and support structural transformation:
  - Improve agricultural productivity (agriculture accounts for 52 percent of employment) to free resources for higher-productivity sectors.
  - Continue liberalizing trade, deepen trade integration, invest in infrastructure, upgrade skills to move up quality/sophistication ladders, and pursue labor and land reforms.
  - Support measures under initiatives such as “Make in India” (facilitating investment, fostering innovation, protecting intellectual property, building manufacturing infrastructure).

### Medium-term policy priorities
- Maintain macroeconomic and financial stability while pursuing structural reforms.
- Continue trade liberalization and greater trade integration.
- Invest in infrastructure and skills to support quality and sophistication upgrading.
- Implement labor and land reforms to bolster competitiveness.
- Support innovation ecosystems (R&D services, risk capital, banking support) to scale high-value service and manufacturing exports.

*Source: IMF staff analysis from the chapter "1990. Service exports growth in developing countries has been higher than in advanced economies, albeit from a low base."*

### 1990. Service exports growth in developing countries has been higher than in advanced

### 1990. Service exports growth in developing countries has been higher than in advanced economies, albeit from a low base.

### Services exports and recent patterns
- Services exports accounted for 15 percent of total exports in EMs.
- In India:
  - Share of services exports in total exports increased rapidly over the last decade to 35 percent, higher than the average in advanced economies.
  - Modern services (finance; computer and information; royalties and license fees; and other business services) account for nearly 70 percent of the total commercial services exports (compared to around 35 percent in EMs).
  - Computer service exports account for almost 70 percent of total service exports.
  - Other important service components: finance, travel, sea transport (freight), and business services (legal, accounting, management, public relations, architecture, engineering, technical services).

### Evolution of goods exports
- Manufacturing trends:
  - China: manufacturing exports accounted for 90 percent of total exports in 2013 (almost double the share during 1980-85).
  - India: share of manufacturing in total merchandise exports increased to 57 percent in 2013 from 41 percent in 1980.
- Primary and resource-based dependence:
  - Primary products account for almost 40 percent of India’s merchandise exports.
  - Key agricultural primary exports: cotton, rice, tea, bovine meat, spices.
  - Key resource exports: precious stones and iron ore.
- Composition within manufactured exports:
  - Manufactured machinery accounts for almost 10 percent of India’s merchandise exports.
  - Textile and garments account for more than 15 percent.
- Technological intensity:
  - Share of high-tech and medium-tech manufacturing exports in total manufacturing exports has increased globally, particularly in China.
  - India shifted away from textiles, gems, leather toward high-tech and medium-tech products (engineering goods), but the share of high-tech and medium-tech manufacturing exports in total goods exports remains substantially lower than China and other EMs.
  - Resource-based production and low-tech manufacturing still dominate India’s goods export basket.

### Direction of India’s exports (geographic shifts)
- Share of exports to the EU and the USA fell to around 29 percent in 2013 from over 45 percent in 2000.
- East Asia and the Middle East emerged as the top two destinations.
- South-South trade:
  - Share of exports to emerging and developing countries is more than half of India’s merchandise exports, growing over 10 percentage points over the last decade.
  - Share of Middle East and North Africa (MENA) has grown over 5 percentage points over the last decade to over 20 percent of India’s total merchandise export.
  - Emerging Asia accounts for almost 20 percent of India’s merchandise trade.

### Diversification of exports
- Aggregate diversification:
  - India has increasingly diversified its merchandise exports over the last three decades (Herfindahl Index decline).
  - Services exports have also become more diversified over time, though service export diversification remains relatively low compared to peer EMs.
- By technological intensity:
  - Increased diversification of primary, resource-based and hi-technology manufacturing exports.
  - Some concentration remains in low- and medium-tech manufacturing.

### Quality, sophistication, and complexity of exports
- Quality:
  - Mean product quality of Indian exports has steadily increased over the last few decades.
  - Selected exports (diamonds, nuclear reactors, tin and alloys) show better quality than peer EMs; on most other goods India fares worse than peers.
- Sophistication (PRODY / EXPY framework):
  - Indian services exports are highly sophisticated—dominated by modern services—and are more sophisticated than the average level of high-income countries.
  - Telecommunications, computer and information services compose almost half of India’s commercial service export basket.
  - Indian goods export sophistication remains low relative to comparator Asian economies, and much lower than China’s and Brazil’s.
- Economic Complexity Index (ECI):
  - India ranks 54 out of 144 countries on the ECI.
  - India ranks higher than Brazil and South Africa but below peer-EMs and China.
  - India is a non-ubiquitous, diversified merchandise exporter.
- Service complexity and ubiquity:
  - Several freight-based transport exports, advertising, marketing, research services are highly connected to the rest of the economy.
  - India falls in the quadrant of relatively non-diversified countries exporting exclusive services (high-value computer exports dominate).

### Revealed Comparative Advantage (RCA) and export categories
- RCA-based classification of India’s export products (goods):
  - Classic products (RCA in both 1990-94 and 2007-11): account for over 60 percent of India’s export basket; average income level associated: 11,734; out of 129 classic products, 38 are income enhancing (PRODY > EXPY).
  - Disappearing products (had RCA at start but not at end): account for almost 4 percent of export basket; average income level approximately 12,225.
  - Emerging products (gained RCA recently): account for almost 10 percent of export value; average income level 12,673; out of 37 emerging products, 40 percent are income enhancing.
  - Marginal products (never had RCA): make up slightly over 25 percent of export basket; average income level almost 19,000; out of 573 marginal products, over 60 percent are income enhancing and belong mostly to medium- and high-tech manufacturing.
- Overall scope:
  - India’s comparative advantage covers less than 20 percent of potential resource and manufactured products (implying potential in about 80 percent of products).
  - India exports only 70 percent of potential tradable services (implying scope to diversify services).

### Product space analysis and implications for diversification
- Product space concepts:
  - Path: sum of proximities of a product to all other products (products with high path are central/core).
  - Density: closeness of a product to a country’s existing export structure (higher density implies higher probability of developing RCA).
- Empirical observations for India:
  - Number of products with comparative advantage increased between 1995 and 2012; core has become more populated.
  - India’s product space shows a core (metal products, machinery, chemicals) and a periphery (fishing, tropical and cereal agriculture).
  - Tradeoff: goods that are close to India’s current export basket tend to be less sophisticated; high income-potential goods are often further away.
  - Emerging products offer promising opportunities: several emerging products have high connectivity to other high-value, complex products.

### Key service export statistics (2007-13, BPM6 working data)
- Computer services:
  - Export value: 54,000 (current US$)
  - Share in export basket: 45.00 percent
  - Share of world service exports: 33.88 percent
  - PRODY: 18,476
  - path: 0.17
  - density: 0.19
  - ubiquity: 8.45
- Travel, Personal, Other:
  - Export value: 14,000
  - Share in export basket: 11.67 percent
  - Share of world service exports: 3.41 percent
  - PRODY: 6,115
  - path: 0.22
  - density: 0.19
  - ubiquity: 6.69
- Other Business Technical, trade-related, and other business:
  - Export value: 12,000
  - Share in export basket: 10.00 percent
  - Share of world service exports: 2.18 percent
  - PRODY: 12,524
  - path: 0.17
  - density: 0.25
  - ubiquity: 6.09
- Other notable service items and associated PRODYs, densities, and export shares are reported in the source tables (e.g., Other Business Professional and management consulting: export value 9,900; PRODY 14,501; share 8.25 percent).

### Implications and policy recommendations (What Needs to be Done)
- Raise value and quality of manufacturing exports, especially high-tech and medium-tech goods:
  - Building on emerging products (40 percent of total emerging products are income enhancing) and rediscovering comparative advantage in disappearing products can bolster export earnings.
  - Diversifying into income-enhancing marginal products (aircraft, machinery, motor vehicles, auto parts, rail construction, heterocyclic compounds) could substantially raise export income.
- Diversify and deepen services exports:
  - Leverage comparative advantage in high-value services to discover niches in services that feed manufacturing supply chains (e.g., R&D, design, engineering, IT).
  - India’s emerging comparative advantage in Research and Development Services is comparable to advanced economies; an ecosystem of risk-based capital and support from banking and financial sectors to scale young firms is critical.
- Pursue quality upgrading and move into central, high-PRODY products:
  - Several niche sectors show capabilities that can be leveraged for higher-volume, higher-value exports.
- Expand export destinations:
  - Further diversify geographic destinations—greater trade complementarity with East Asia has grown (17 percent in 1990 to 32 percent in 2008).
  - Substantial potential to expand trade with South Asia and regions such as Central Asia, Eastern Europe, Latin America, and Africa.
- Address domestic constraints and support structural transformation:
  - Improve agricultural productivity (agriculture accounts for 52 percent of employment) to free resources for higher-productivity sectors.
  - Continue liberalizing trade, deepen trade integration, invest in infrastructure, upgrade skills to move up quality/sophistication ladders, and pursue labor and land reforms.
  - Support measures under initiatives such as “Make in India” (facilitating investment, fostering innovation, protecting intellectual property, building manufacturing infrastructure).

### Medium-term policy priorities
- Maintain macroeconomic and financial stability while pursuing structural reforms.
- Continue trade liberalization and greater trade integration.
- Invest in infrastructure and skills to support quality and sophistication upgrading.
- Implement labor and land reforms to bolster competitiveness.
- Support innovation ecosystems (R&D services, risk capital, banking support) to scale high-value service and manufacturing exports.

*Source: IMF staff analysis from the chapter "1990. Service exports growth in developing countries has been higher than in advanced economies, albeit from a low base."*

### 1. Reducing Trade Barriers and Fostering Integration:

### 1. Reducing Trade Barriers and Fostering Integration

### Trade reform priorities and evidence
- Key reform areas: 1) reducing trade restrictiveness; and 2) improving trade facilitation.
- A World Bank study shows India’s Overall Trade Restrictiveness Index is high relative to other G20 economies; restrictiveness in goods and service imports are high.
- Reducing trade restrictiveness will help export performance (Joshi et al., 2006).
- Improving trade facilitation—policies aiming at reducing export and import costs—will be important for realizing higher trade potential (Portugal-Perez et al., 2010).
- Hoekman et al., 2011, found that a 10 percent reduction in the cost associated with importing (exporting) would increase imports (exports) by about 5 percent.
- India scores much below China, Brazil, South Africa and other comparator Asian economies on the Overall Logistic Performance Index of the World Bank.
- India scores particularly low on efficiency of customs clearance, quality of trade, and transport-related infrastructure.
- Broadman, 2007: a 10 percent improvement in export custom procedures would enhance merchandise export performance by 15 percent and manufacturing export performance by 17 percent.
- India is extremely restrictive in different modes of supply for services (Mattoo et al., 2013).
- Modi and Subramanian, 2015: exemptions in countervailing duties on imports are undermining Indian manufacturing and the “Make in India” initiative.

### Regional integration benefits
- Fostering regional trade integration will:
  - reduce trading costs,
  - help integrate with the rest of the world,
  - improve competitiveness.
- Regional trade integration reduces real trade costs and behind-the-border barriers in the region (Pomfret and Sourdin 2009).
- Integrated South Asian markets would:
  - improve scale economies of domestic firms in manufacturing and services,
  - attract higher investments,
  - increase competition,
  - promote efficiency,
  - facilitate skills and knowledge spillovers (Kumar and Singh, 2009).
- Regional integration may help attain internationally acceptable productivity and quality levels (Draper et al., 2013).

### Trade liberalization, productivity, and demographic dividend
- Expansion of trade and integration can accelerate productivity convergence.
  - Firm-level evidence: trade liberalization has encouraged greater competition and efficiency gains and is associated with increases in the growth rate of productivity (Krishna and Mitra 1998; Topalova and Khandelwal 2011).
  - Dissemination of knowledge and technologies would help build domestic regional trade hubs and bolster export performance.
- Trade liberalization will help harness the demographic dividend.
  - India’s demographic transition could add about 2 percentage points per annum to India’s per capita GDP growth over the next two decades (Aiyar et al., 2011).
  - The demographic dividend will only be fully realized if India creates gainful employment opportunities that harness the growing working age population.
  - Bloom and others (2003): trade reforms could play an important role; China capitalized on the demographic dividend through trade liberalization in the 1960s (Gernaut and others 2006).
  - Absence of liberalization in Latin America in the early-1980s cost the region an average 0.9 percent growth per annum (IDB, 2000).
  - Bloom and others (2004): openness could double the size of a country’s demographic dividend.
  - For countries relatively more open to trade, the shift in age structure toward a greater working age ratio is more likely to be translated into higher saving (Behram and others 1999).
  - Decline in unemployment along a country’s average age profile is much steeper for countries more open to trade; trade policy might help release pressure from labor markets as large shares of the population enter working-age.

### Global Value Chains (GVCs) and services
- Goals and empirical regularities:
  - Rich and fast-growing economies export complex products and services in intricate supply chains.
  - Successful integration and upgrading in GVCs can underpin development success; countries that participate more in GVCs are richer and those that integrate more rapidly grow faster (World Trade Report, 2014).
  - Technology and knowledge transfers are higher across countries linked through GVCs (Piermartini and Rubinova, 2014).
  - Favorable domestic business environment correlates with greater GVC integration; infrastructure and customs barriers are major obstacles (World Trade Report, 2014).
  - Tariffs on intermediate goods have a significant negative effect on GVC participation (IMF, 2015a).
- Trade facilitation measures could reduce trading times and improve predictability.
- Firms combine comparative advantages of locations with their resources and competencies to maximize competitive advantage (Mudambi, 2008); common pattern is the “smile” of value creation splitting high and low value–added activities.
- Even developing economies with large manufacturing must develop state-of-the-art services to connect to GVCs and move into more skill-intensive activities (Loungani and Mishra, 2014).
- Policies can foster cooperation between firms in clusters and between firms and universities to enable communities across India to export.

---

### 2. Liberalize Foreign Direct Investment Regime

### Rationale and evidence
- Greater focus on FDI to boost exports and enhance productivity.
- Liberalizing FDI regime and processes would enhance export competitiveness by lowering production costs and boosting exports performance.
- Significant progress has been made in liberalizing the FDI regime in recent years; however, FDI inflows have not picked up substantially.
- Ample scope to simplify procedures, improve business environment, and expedite regulatory and other clearances at all levels to translate greater liberalization into higher inflows.
- Higher FDI would increase exports through capacity-increasing effects and spillovers such as increasing competition and transfer of knowledge (Iacovone et al., 2011).
- Higher FDI tends to increase the quality of exports in developing countries (Harding and Javorcik, 2012).
- FDI spurs domestic investment by lowering costs of adopting new technologies (Borenszstein et al., 1998).
- An Indian IT firms study: probability of exporting and the volume of exports are higher for firms receiving FDI; spillover effects raise the probability of exporting for non-recipient firms as well (Kemme et al., 2009).

---

### 3. Improve Infrastructure Planning

### Investment needs and constraints
- Investments to improve export-related infrastructure and boost industrial production are vital to realize export potential.
- Structural reforms are needed to remove supply bottlenecks to strengthen exports.
- Constraints, particularly in energy and mining, have prevented Indian exports from benefiting from recent rupee depreciation (see IMF, 2015b).
- Needed investments:
  - improving inland roads/railway lines to ports,
  - enhancing warehousing and cold storage facilities,
  - improving port/airport capacity to handle export consignments.
- Investments will also be required to boost industrial production to support export expansion; this requires enhancing the business environment, developing infrastructure, and deepening financial markets (Tokuoka, 2012).
- Reducing economic policy uncertainty will boost investment (Anand et al, 2014).
- Perez et al., 2010: investment in physical infrastructure and regulatory reforms to improve the business environment lead to higher export performance.
- Mohan and Kapur (2015) emphasize land reforms, especially in urban areas; traditional prejudice through urban land ceilings and other regulations has discouraged industrial location in cities where skilled labor is more likely to be available.

### Urbanization and planning implications
- Sizes of mega cities:
  - Delhi (over 20 million),
  - Mumbai (over 20 million),
  - Kolkata (over 15 million),
  - Bangalore (over 10 million).
- There are over 54 other cities in India with over a million people.
- The trend is expected to continue over the next two decades at least.
- Informational networks in cities attract a large proportion of high ability workers, making cities productivity centers (Venables, 2014).
- Central and sub-national policymaking must utilize international resources to solve supply chain congestion and plan for long term efficiency.

---

### 4. Develop Skills and Liberalize Labor Markets

### Skills development
- Building human capital and upgrading skills is critical to increase value, quality, and income potential of Indian exports.
- Manufacturing faces twin problems: those available for employment lack necessary skills; those who have skills are less willing to work in manufacturing (Chandra, 2015).
- Need to prepare low-skilled workers to become “industrial persons” by providing training in manufacturing and behavioral skills.
- Skilled workers need to be attracted into manufacturing by focusing on innovation to push India toward the technology frontier.
- Policy initiatives needed to integrate skilling efforts with manufacturing policy and to integrate Indian firms into global and regional production networks.
- New ministry for skill development and entrepreneurship: mandate to skill 500 million people by 2020 and create an ecosystem to encourage entrepreneurship.
- Recently announced social safety net for workers in the informal sector is a welcome step.

### Labor market reform rationale
- Firm-level evidence from many countries: industries with more stringent employment protection tend to exhibit lower productivity growth.
- Such protection can slow job creation in global value chains, causing countries to miss agglomeration effects and knowledge spillovers.
- Countries with more flexible labor markets experience greater structural change as resources flow more freely across sectors and firms.
- Labor law reforms are necessary to realize efficiency and productivity gains in manufacturing (Dabla-Norris et al., 2013; Krishna and Mitra, 1998).
- IMF, 2014: easing product and labor market restrictions will boost India’s competitiveness and bolster exports performance.

---

### 5. Environment for Innovation and Entrepreneurship

### Role of innovation and policy actions
- New technology and cultural inventions from India could shape future economic growth.
- Most Fortune 500 companies have strong presence in high end technology and R&D services across finance, computers, pharmaceutical, or defense.
- Policy can improve legal framework and enforcement ability for starting new businesses for exports.
- Important to address local political uncertainties associated with investment across locations in India.
- Entrepreneurs using technology for innovations in agriculture and green and renewable energy will be key.
- India’s strengths: massive market size and human potential; breakthrough home-grown exportable innovations in finance, marketing and technology could bring inclusive growth.
- Opportunities for entrepreneurs to provide business solutions for the transition from low productivity to tradable niche activities are immense.
- Example analogy: California, with a population barely 3 percent of India, has GDP very similar to India driven by a few concentrated specialized export hubs; similar clusters with unique inventions could be growth engines in India and require an enabling environment for openness and creative inventions.

*Source: _wp15119 - 1. Reducing Trade Barriers and Fostering Integration*

### APPENDIX ON METHODS

### APPENDIX ON METHODS

### Diversification
- Export Diversification in service exports (HI) is a time- and country-specific measure of export concentration by country c (or c’), goods/services i (or i’ or i’’), and years t (or t’).  
- HI is calculated from export shares E_cit and E_ci't in the usual Herfindahl form as shown in the source (matrix summation notation preserved in the source).

### Technology Intensity of Exports
- Products are classified following Lall (2000) into: primary, resource-based, low-, medium- or high-tech.
- Low-technology manufactures:
  - Characterized by stable, well-diffused technologies primarily embodied in capital equipment.
  - Examples: textile fabrics, clothing, headgear, footwear, leather manufactures, travel goods, pottery, simple metal parts and structures, furniture, jewelry, toys, plastic products.
- Medium-technology products:
  - Bulk of skill- and scale-intensive capital goods and intermediate products; complex technologies, moderately high levels of R&D, advanced skill needs and lengthy learning periods.
  - Examples: (i) automotive products (passenger vehicles and parts, commercial vehicles, motorcycles and parts); (ii) process industries (synthetic fibers, chemicals and paints, fertilizers, plastics, iron, pipes/tubes); (iii) engineering industries (engines, motors, industrial machinery, pumps, switchgear, ships, watches).
- High-technology products:
  - Advanced, fast-changing technologies with high R&D investments and emphasis on product design; require sophisticated technological infrastructure and specialized skills.
  - Examples: (i) electronics and electrical products (office/data processing/telecommunications equipment, TVs, transistors, turbines, power-generating equipment); (ii) other high tech (pharmaceuticals, aerospace, optical/measuring instruments, cameras); (iii) other transactions (electricity, cinema film, printed matter, “special” transactions, gold, art, coins, pets).
- Technologically sophisticated products tend to be associated with a high PRODY.

### Quality
- Export quality is estimated using unit values (average traded price for each product category) from the IMF’s export quality database.
- Quality is calculated as the unit value adjusted for differences in production costs and for selection bias stemming from relative distance.
- Method:
  - For a given product, trade price (unit value) is modeled as a function of unobserved quality, exporter GDP per capita, and selection bias (exports to more distant destinations skew toward high-priced goods).
  - A quality-augmented gravity equation is specified and substitution yields 851 sets of coefficients for each product.
  - Results produce a comprehensive set of quality estimates aggregated into a multi-level database.
- References in the source: Schott (2004), Hummels and Klenow (2005); construction details in “Export Quality in Developing Countries” by Christian Henn, Chris Papageorgiou, and Nikola Spatafora, IMF WP/13/108.

### Revealed Comparative Advantage (RCA)
- RCA measures whether a country’s share of a product’s world market is larger or smaller than the product’s share of the entire world market (Balassa, 1965).
- Notation in source: K is an industrial index, j is a country index, X is export; RCA written in matrix summation notation in the source.
- Classification of products by RCA evolution (Table 1):
  - Classic: 2000-2006 RCA>1 and 2007-2012 RCA>1
  - Marginal: 2000-2006 RCA<1 and 2007-2012 RCA<1
  - Disappearing: 2000-2006 RCA>1 and 2007-2012 RCA<1
  - Emerging: 2000-2006 RCA<1 and 2007-2012 RCA>1
- Interpretation:
  - Classic = traditional exports with persistent comparative advantage.
  - Emerging = developed comparative advantage recently.
  - Disappearing = lost comparative advantage.
  - Marginal = never had comparative advantage.

### Sophistication (PRODY and EXPY)
- PRODY_i,t: potential income level of a service i in time t, computed using GDP per capita (GDPPC) of all exporting countries, weighted by the share of i in each country’s total exports (formula preserved in source notation).
- EXPY_c: potential income level of a country’s export basket, defined as the weighted average of PRODY across services i using export shares E_ci,t (explicit summation notation in source).
- Empirical note: Econometric cross-country time-series analysis indicates EXPY is a strong and robust predictor of subsequent economic growth (HHR 2007; Mishra et al 2011, 2012; Anand et al 2013).
- Conceptual note: Sophistication reflects internal knowledge and external knowledge transfer to human capital and R&D, contributing to rising export sophistication (see Xang He, 2010).

### Indicators used in Product Space Analysis
- Proximity φ between two products i and i’ in time t:
  - φ_{i,i’,t} = min{ P(RCA_{c,i,t}>1 | RCA_{c,i’,t}>1), P(RCA_{c,i’,t}>1 | RCA_{c,i,t}>1) } where conditional probabilities P are computed across all countries c in year t (formula and indicator x_{cit} = 1 if RCA>1 preserved in source).
- PATH_s (Path): sum of all proximities between product i and all other products (formula: PATH_{i,t} = Σ_{i’} φ_{i,i’,t} as given in source).
  - Interpretation: Longer PATH indicates product is more central in the product space and offers a better platform for further diversification.
  - Caveat: PATH does not consider characteristics (e.g., income level) of the products i’ to which i is close.
- Density_{c,s}: scaled (0 to 1) measure of the relative position of product s with respect to a country c’s current export basket; equals ratio of (a) sum of proximities between product s and products in which country c has RCA>1 to (b) sum of proximities of product s with all products (explicit summation notation preserved in source).

### Bi-Partite Network Structure – Complexity (ECI and PCI)
- Start with binary matrix M_{c,p} where M_{c,p}=1 if country c is a significant exporter of product p; diversity and ubiquity are row/column sums.
- Diversity (k_{c,0}): observed level of diversification of a country (notation from source).
- Ubiquity (k_{p,0}): observed number of countries exporting product p.
- Recursive correction: use diversity to correct ubiquity and vice versa via iterations (n iterations until rankings don’t change), using the recursive equations and matrix notation given in the source.
- The eigenvector associated with the second largest eigenvalue captures the largest amount of variance and forms the basis for the Economic Complexity Index (ECI) and Product Complexity Index (PCI):
  - ECI = (K - <K>) / stdev(K) (notation and normalization as in source)
  - PCI analogously defined by exchanging country and product indices.

### Variable Definitions (Table 4)
- k_{c,0}: Observed level of diversification of a country
- k_{p,0}: Observed number of countries exporting product p
- k_{c,1}: A generalized measure of ubiquity of country c’s exports
- k_{p,1}: A generalized measure of diversity of product p’s exporters
- RCA: Revealed comparative advantage
- M_{c,p}: In a matrix of countries and product, M_{c,p}=1 if country c is a significant exporter of product p
- HI_c: Herfindahl index, a measure of export concentration of country c
- PRODY_p: Average income per capita associated with product p
- EXPY_c: Average PRODY of its exports
- density_{c,p}: A country’s likelihood to export product p in the future
- PATH_p: A product’s association to other products

### Panels and Empirical Illustrations (selected highlights from panels)
- Panel I: Composition of India’s Manufactured Exports (average 2010-12) lists top hi-tech, medium-tech, low-tech, primary, and resource-based exports as percent of merchandise exports (visuals and product lists preserved in source).
- Panel II: India’s Export Basket, 2012 (Atlas of Economic Complexity, Hasumann, Hidalgo et al. 2014) — gross export basket based on SITC Rev. 3.
- Panel III: Services Exports:
  - Growth in services exports (2000=100) series presented for Brazil, China, India, Russia, South Africa, EM Median (2001–2011).
  - Share of India's exports in World Services Exports (percent of World Services Exports) series (2000–2013).
  - Modern IT and IT enabled services are growing faster than other EMs (2001=100).
  - Modern vs Traditional Services share comparisons across countries (2001/2011).
- Panel IV: Composition of Services Exports:
  - Service Export Basket, 2008-13 (BPM6 Working dataset of service credit accounts, IMF, 2014).
  - Growing importance of India’s service exports in the world: shares of India's service exports in world service exports and share of service exports in India's GDP (visual cross-category breakdown preserved in source).
- Panel IV.C: Average Annual Growth of India’s Service Exports (periods 2000-07 and 2008-13) — selected entries preserving exact figures from source:
  - Services Total: 22.3 (2000-07) and 9.1 (2008-13)
  - Maintenance and repair services n.i.e.: 95.8
  - Transport: 21.4 (2000-07) and 8.4 (2008-13)
  - Transport, Passenger: 18.5 and 39.1
  - Transport, Freight: 20.3 and 26.0
  - Travel: 15.9 and 9.0
  - Travel, Business: 66.7
  - Insurance and pension: 23.1 and 5.9
  - Financial: 35.8 and 10.6
  - Telecommunications, computer, and information: 29.1 and 10.1
  - Other Business Professional and management consulting: 41.5 and 14.6
  - Other Business Research and development: 76.9 and -2.5
  - Personal, cultural, and recreational: 80.3 and 14.7
  - Government goods and services n.i.e.: -5.8 and 6.2
  - (Full sector-level listing with exact values provided in the source.)
- Panel V–VIII: Direction of Merchandise Exports, Export Destinations, Exports Diversification, and Merchandise vs Services diversification metrics for India presented using WITS and BPM data (visuals and country comparisons preserved in source).
- Panel IX: Export Quality:
  - Panel A: Export quality in 1990 and 2010 (IMF export quality database, WITS database, SITC Rev. 4).
  - Panel B: Quality comparison across specific products (relative positions of India vs EM Max, EM Median, EM Min).
  - Panel C and D: India’s overall product export quality time series and average export quality in 2010 by commodity group (resource based vs manufacturing and related).
- Panel X: Sophistication of Indian Exports:
  - Goods and Manufacturing export sophistication series (2000–2009) comparing Brazil, China, India, Russia, South Africa, EM Median (values in the 9.2–9.9 range for goods/manufacturing).
  - Services export sophistication (2000–2013) comparing LICs, Upper MICs, India, Brazil, China (values noted in the source, e.g., 8.8–10.0 range).
- Panel XI–XIV: Revealed Comparative Advantage for Service Exports (India), Product Space visualizations for Germany (1995, 2012) and India, top income-enhancing products from India by comparative advantage (averages 2008-12) — categorizations into Classic, Emerging, Disappearing, Marginal preserved as in source.
- Panel XV: Policy Prospects — selected indicators and cross-country comparisons (exact measures from source):
  - Overall Trade Restriction Index (2009) comparisons across countries (MYS BRA PHL COL UKR MEX RUS IND THA CHN PER ARG TUR CHL ZAF IDN).
  - Overall Service Trade Restrictiveness Index (2008-12) comparisons (scale: Completely open (0) … Completely closed (100)).
  - Manufacturing firm survey indicators (Enterprise Survey, World Bank, 2014): Number of electrical outages in a typical month; Days to obtain an electrical connection; Number of water insufficiencies; Proportion of total sales that are domestic; Proportion of total sales that are exported directly; direct exporters defined as direct exports are 10% or more of sales.
  - Global Innovation Index, 2014 country ranking snippet (India and peers).
  - GCI Index component comparisons and category labels (Basic requirements; Efficiency enhancers; Innovation) from WEF Global Competitiveness Index (2014/15).

*Source: _wp15119 - APPENDIX ON METHODS (IMF PDF)._

### REFERENCES

### _wp15119 - REFERENCES

### Demographics and Labor
- Aiyar, SS., and A. Mody, 2011, “The Demographic Dividend: Evidence from the Indian States,” IMF Working Paper No. 11/38 (Washington: International Monetary Fund).
- Behrman, J., S. Duryea and M. Székely, 1999, "Aging and Economic Opportunities: Major World Regions around the Turn of the Century," RES Working Papers 4180, Inter-American Development Bank, Research Department.
- Bloom, D., D. Canning, and J. Sevilla, 2003, “The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change,” Population Matters Series. Santa Monica, California: Rand.
- Bloom, D. and D. Canning, 2004, “Global Demographic Change: Dimensions and Economic Significance,” NBER Working Papers 10817, National Bureau of Economic Research, Inc.

### Trade, Export Diversification, and Export Quality
- Al-Marhubi, F., 2000, “Export diversification and growth: an empirical investigation,” Applied Economics Letters vol. 7: 559–62.
- Brenton, P., and R. Newfarmer, 2007, “Watching More Than the Discovery Channel: Export Cycles and Diversification in Development”, Trade Department, World Bank.
- Bleaney, M., and D. Greenaway. 2001, “The Impact of Terms of Trade and Real Exchange Volatility on Investment and Growth in Sub-Saharan Africa.” Journal of Development Economics 65: 491–500.
- Dornbusch, R., D. Fischer, and Samuelson, P.A., 1977, ”Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods” American Economic Review, Vol 67 No. 5, pp 823-839.
- Henn, C. and C. Papageorgiou and N. Spatafora, 2015, "Export quality in advanced and developing economies: Evidence from a new dataset," WTO Staff Working Papers ERSD-2015-02, World Trade Organization (WTO), Economic Research and Statistics Division.
- Henn, C., C. Papageorgiou and N. Spatafora, 2013, "Export Quality in Developing Countries," IMF Working Papers 13/108, International Monetary Fund.
- Hummels, D., and P. Klenow, 2005, “The Variety and Quality of a Nation’s Exports”; AER 95, 704-723.
- Imbs, J., and R. Wacziarg, 2003, “Stages of Diversification,” American Economic Review, Vol. 93, pp. 63–86.
- Khandelwal, A., 2010, “The Long and Short (of) Quality Ladders,” Review of Economic Studies, Vol. 77, pp. 1450–1476.
- Pham, C., and W. Martin. 2007, “Extensive and Intensive Margin Growth and Developing Country Exports.” Unpublished. World Bank, Washington, D.C.
- Pomfret, R. and P. Sourdin, 2009, “Have Asian Trade Agreements Reduced Trade Costs?” Journal of Asian Economics, 20, 255-268.
- Pomfret, R. & P. Sourdin, 2010. "Why do Trade Costs Vary?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(4), pages 709-730, December.
- Portugal-Perez, A., and J.S. Wilson, 2010, “Export Performance and Trade Facilitation Reform – Hard and Soft Infrastructure,” Policy Research Working Paper Series 5261, The World Bank.
- Schott, P., 2004, “Across-Product Versus Within-Product Specialization in International Trade,” Quarterly Journal of Economics, Vol. 119, pp. 646–677.
- Topalova, P. and A. Khandelwal, 2011, “Trade Liberalization and Firm Productivity: The Case of India,” Review of Economics and Statistics, 93(3).
- Henn, C., C. Papageorgiou and N. Spatafora, 2013, "Export Quality in Developing Countries," IMF Working Papers 13/108, International Monetary Fund.

### Services, Offshoring, and Service Export Sophistication
- Arnold, JM and B. Javorcik, M. Lipscomb and A. Mattoo, 2012, "Services reform and manufacturing performance : evidence from India," Policy Research Working Paper Series 5948, The World Bank.
- Borchert, I. and B. Gootiiz and A. Mattoo, 2012, "Guide to the Services Trade Restrictions Database," Policy Research Working Paper Series 6108, The World Bank.
- Bosworth, B and A Maertens,2010, “The Role of the Service Sector in Economic Growth and Employment in South Asia”, in Ejaz Ghani (ed.) Service Revolution in South-Asia, World Bank and Oxford University Press.
- Hoekman, B. and A. Nicita, 2011, “Trade Policy, Trade Costs, and Developing Country Trade,” World Development, Vol. 39, No. 12, pp. 2069 – 2079.
- Hoekman, B. and A. Mattoo, 2011, "Services Trade Liberalization and Regulatory Reform : re-Invigorating International Cooperation," Policy Research Working Paper Series 5517, The World Bank.
- Loungani, P. and S. Mishra, 2014, “Not your Father’s Service Sector”, Finance and Development, June 2014, Vol. 51, No. 2
- Mishra, S., 2015. “International Trade in Services and the Comparative Advantage of Nations: New Data and Stylized Facts” Forthcoming IMF Working Paper.
- Mishra, S., S. Lundstrom, and R. Anand, 2011, “Service Export Sophistication and Economic Growth,” World Bank Working Paper 5606.
- Mudambi, R., 2007. “Offshoring: Economic Geography and the Multinational Firm,” Journal of International Business Studies, Vol. 38, pp. 206–10.
- Iacovone, L., F. Rauch, and A. L. Winters, (2013), “Trade as an Engine of Creative Destruction: Mexican Experience with Chinese Competitiion”, Journal of International Economics 89(2): 379-392.

### Foreign Direct Investment, Knowledge Spillovers, and Technology
- Borenszstein, E., J. D. Gregorio and J. W. Lee, 1998, “How Does Foreign Direct Investment Affect Growth?” Journal of International Economics 45(1): 115-135.
- Harding, T. and B. S. Javorcik, 2012, “FDI and Export Upgrading”, Review of Economics and Statistics 94(4): 964-980.
- Gutierrez de P., S. Amin and M. Ferrantini (2002).
- Dabla-Norris, E. and G. Ho & K. Kochhar, A. Kyobe and Robert Tchaidze, 2013, "Anchoring Growth: The Importance of Productivity-Enhancing Reforms in Emerging Market and Developing Economies," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1450001-1-1.
- Piermartini, R. and S. Rubinova, 2014. “International Production Networks and the Geography of Knowledge Spillovers”, Geneva: WTO, Working Paper, forthcoming.
- Arrow, K. J., 1969, “Classificatory notes on the production and transmission of technological knowledge,” American Economic Review, Vol. 59 (2), 29–35.
- Leamer, E.E. 1984, Sources of Comparative Advantage: Theory and Evidence. Cambridge MA: The MIT Press.
- Leamer, E.E., J. Levinsohn, 1995, International trade theory: the evidence. In: Grossman, Gene M., Rogoff, K. (Eds.), Handbook of International Economics, vol. III. Elsevier B.V., pp. 1341–1375 (chapter 26).
- Venables, A.J., 2011. “Productivity in cities; self-selection and sorting”, Journal of Economic Geography, 11, 241-252.

### Economic Complexity, Product Space, and Structural Transformation
- Hausmann, R. and D. Rodrik, 2003, “Economic Development as Self Discovery”; Journal of Development Economics 72, 603-633.
- Hausmann, R., J. Hwang, and D. Rodrik, 2007, “What You Export Matters,” Journal of Economic Growth, 12:1 : 1-25.
- Hausmann, R., and B. Klinger. 2006, “Structural Transformation and Patterns of Comparative Advantage in the Product Space,” Working Paper No. 128. Center for International Development, Harvard University.
- Hausmann, R., CA Hidalgo, S Bustos, M Coscia, S Chung, J Jimenez, A Simoes, M Yildirim. 2011, “The Atlas of Economic Complexity”. Puritan Press. Cambridge MA.
- Hidalgo, C., B. Klinger, A.L. Barabási, R. Hausmann, 2007, “The Product Space Conditions the Development of Nations. Science 317 (5837), 482–487 (New York, N.Y.).
- Simoes, AJG, CA Hidalgo, 2011. “The Economic Complexity Observatory: An Analytical Tool for Understanding the Dynamics of Economic Development”, Workshops at the Twenty-Fifth AAAI Conference on Artificial Intelligence
- Imbs, J., and R. Wacziarg, 2003, “Stages of Diversification,” American Economic Review, Vol. 93, pp. 63–86.

### India, South Asia, and Regional Integration
- Anand, R., S. Mishra, and N. Spatafora, 2012, “Structural Transformation and the Sophistication of Production”, IMF Working Paper No. 59.
- Anand, R. and V. Tulin, 2014, “Disentangling India’s Investment Slowdown,” IMF Working Paper No. 14/47.
- Bosworth, B and A Maertens,2010, “The Role of the Service Sector in Economic Growth and Employment in South Asia”, in Ejaz Ghani (ed.) Service Revolution in South-Asia, World Bank and Oxford University Press.
- De, P., 2009, “Global Economic and Financial Crisis: India's Trade Potential and Future Prospects”, Asia-Pacific Research and Training Network on Trade Working Paper No. 64.
- Garnaut, R. and L. Song (eds), 2006, The Turning Point in China’s Economic Development, Asia Pacific Press, Canberra.
- Ghani , E and H. Kharas 2010, The Service Revolution in South Asia, Oxford University Press.
- Joshi, V. and I. M. D Little, 2006, India’s Economic Reforms 1991 -2001, Oxford University Press, Oxford.
- Kemme, D., M., D. Mukherjee and A. Nikolsko-Rzhevskyy, 2009, “Foreign Direct Investment and Export Performance in Emerging Economies: Evidence from Indian IT Firms,” Available at SSRN: http://ssrn.com/abstract=1455249
- Kiichi, T., 2013, "Policy Focus: Does a better business environment stimulate corporate investment in India?," Indian Growth and Development Review, Emerald Group Publishing, vol. 6(2), pages 289 - 305, October.
- Kochhar, K., U. Kumar, R. Rajan, A. Subramanian and I. Tokatlidis, 2006, "India's Pattern of Development: What Happened, What Follows?" Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July
- Kumar, R. and M. Singh, 2009, “India’s Role in South Asia Trade and Investment Integration,” ADB Working Paper Series on Regional Economic Integration, No. 32.
- Modi, A. and A. Subramanian, 2015, “Make in India” Not by Protecting but by Eliminating Negative Protectionism, Business Standard, April 30, 2015.
- Mohan, R. and M. Kapur, 2015, “Pressing the Indian Growth Accelerator: Policy Imperatives,” IMF Working Paper No. 15/53
- Research and Information System for Developing Countries, 2009. “South Asia Cooperation and Development Report 2008,” Oxford University Press, New Delhi.
- World Bank, 2010, “Moving up, Looking East,” World Bank South Asia Economic Update, 2010

### Productivity, Innovation, and Firm-Level Effects
- Darlhman, C., 2007, “Improving, Technology, Skills and Innovation in South Asia”, in Ejaz Ghani, editor, South Asia’s Growth and Economic Integration.
- Hausmann, R. and D. Rodrik, 2003, “Economic Development as Self Discovery”; Journal of Development Economics 72, 603-633.
- Krishna, P. and D. Mitra, 1998,”Trade Liberalization, Market Discipline and Productivity Growth: New Evidence from India,’’ Journal of Development Economics 56:2.
- Lall, S., 2000, “The Technological Structure and Performance of Developing Country Manufactured Exports, 1985–98,” Oxford Development Studies 28(3).
- Lall, S., J. Weiss, and J. Zhang, 2005, “The ‘Sophistication’ of Exports: A New Measure of Product Characteristics,” Queen Elizabeth House Working Paper 123, Oxford University.
- Iacovone, L., F. Rauch, and A. L. Winters, (2013), “Trade as an Engine of Creative Destruction: Mexican Experience with Chinese Competitiion”, Journal of International Economics 89(2): 379-392.
- Topalova, P. and A. Khandelwal, 2011, “Trade Liberalization and Firm Productivity: The Case of India,” Review of Economics and Statistics, 93(3).

### Data Sources, Institutional Reports, and Working Papers
- International Monetary Fund, Balance of Payment Statistics, 2015, BPM5 Dataset.
- International Monetary Fund, Balance of Payment Statistics, 2015, BPM6 Working Dataset.
- International Monetary Fund, 2015 a, Regional Economic Outlook: Asia Pacific (Washington, April)
- International Monetary Fund, 2015 b, India: Selected Issues, IMF Country Report No. 15/62 (Washington DC)
- International Monetary Fund, 2014, India: Selected Issues, IMF Country Report No. 14/58 (Washington DC)
- World Bank, 2015, World Development Indicators Online. http://data.worldbank.org/
- Inter-American Development Bank, 2000, “Development Beyond Economics – Economic and Social Progress in Latin America,” IDB Report.
- De Ferranti, David; G. Perry, D. Lederman and W. Maloney, 2002, “From Natural Resources to the Knowledge Economy”, The World Bank.
- Borenszstein, E., J. D. Gregorio and J. W. Lee, 1998, “How Does Foreign Direct Investment Affect Growth?” Journal of International Economics 45(1): 115-135.
- Dabla-Norris, E. and G. Ho & K. Kochhar, A. Kyobe and Robert Tchaidze, 2013, "Anchoring Growth: The Importance of Productivity-Enhancing Reforms in Emerging Market and Developing Economies," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1450001-1-1.

*References compiled from _wp15119 - REFERENCES.*

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