Understanding Export Diversification: Key Drivers and Policy Implications

Author/Editor:

Rahul Giri ; Saad N Quayyum ; Rujun Yin

Publication Date:

May 10, 2019

Electronic Access:

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

Summary:

We identify key factors, from large set of potential determinants, that explain the variation in export diversification across countries and over time using Bayesian Model Averaging (BMA), which addresses model uncertainty and ranks factors in order of importance vis-a-vis their explanatory power. Our analysis suggests, in order to diversify, policy makers should prioritize human capital accumulation and reduce barriers to trade. Other policy areas include improving quality of institutions and developing the financial sector. For commodity exporters reducing barriers to trade is the most important driver of diversification, followed by improving education outcomes at the secondary level and financial sector development.

Series:

Working Paper No. 19/105

Subject:

English

Publication Date:

May 10, 2019

ISBN/ISSN:

9781498313087/1018-5941

Stock No:

WPIEA2019105

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

29

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