Determinants of export sophistication: Evidence from Monte Carlo simulations (original) (raw)

Export Sophistication: A Dynamic Panel Data Approach

Emerging Markets Finance and Trade, 2018

In this paper we analyze export sophistication based on a large panel dataset (2001-2015; 101 countries) and using various estimation algorithms. Using Monte Carlo simulations we evaluate the bias properties of estimators and show that GMM-type estimators outperform instrumentalvariable and fixed-effects estimators. Based on our analysis we document that GDP per capita and the size of the economy exhibit significant and positive effects on export sophistication; weak institutional quality exhibits negative effect. We also show that export sophistication is pathdependent and stable even during a major economic crisis, which is especially important for emerging and developing economies.

Determinants of Export Sophistication

2012

Recent literature indicates the importance of export sophistication for growth. This paper extends the empirical work of Hausmann et al. (2007) to examine the causal eect of foreign direct investment, remoteness from major markets, and institutional quality on export sophistication. Using cross country panel data, the …nding shows that FDI has a positive eect; and the eect is greater for countries with low institutional quality. Similarly, remoteness from major markets has a strong negative eect. With regard to institutional quality, its eect on export sophistication is evident only in manufactured exports. The results are robust to alternative measurement of the dependent variable and econometric estimation methods. The …ndings have important implications for developing countries that strive to enhance their export sophistication.

Impact of Institutional Quality on Bilateral Exports: Exploring the role of Development

Journal of Applied Economics and Business Studies

This study uses the gravity model to analyze the homogeneous and heterogeneous effect of institutional quality and development on bilateral exports. We use the panel data of 61countries for the period 2000 to 2016 and employ the Poisson Pseudo Maximum Liklihood (PPML) econometric technique with a High-Dimensional fixed effect (HDFE) for an estimation that allows the analysis in the presence of high dimensional fixed effects. The findings reveal that the direct effect of institutional quality and level of development on bilateral exports is positive and significant. Further, the institutional quality and the level of development of the exporter country have more impact on bilateral exports than that of the importer country. Our estimation results of homogeneity of institutions show that when both trading countries share the same level of institutional quality, it boosts the bilateral exports. The major finding of this study reveals that the interaction effect of institutional qualit...

Institutional Determinants of the Quality of National Export

Polonia University Scientific Journal, 2016

In the article we analyze the impact of institutional factors on export of innovation in various countries. The components of the Global Innovation Index are important indicators that predict international competitiveness of export, these are, for example, quality of institutions, state of human capital, level of expenditure on research, infrastructure, etc. In this study we examine the influence of economic policies on technical complexity of export.

Do FDI and Patents Drive Sophistication of Exports? A Panel Data Approach

Prague Economic Papers

This paper investigates whether inflows of FDI and innovative activities act as a channel of knowledge spillovers in improving quality of countries' output. In measuring export quality, sophistication of a country's export basket is utilized. Utilizing panel data of countries for the period 2002-2015 and applying GMM methodology, the results indicate that the level of financial development, the quality of human capital and globalization of a country have a determinant role on the relation between knowledge spillover channels and the quality of exports. Patent applications generally positively affect sophistication of exports. FDI serves as a channel for knowledge spillovers to benefit the sophistication level of exports only for developed, more educated, financially developed and globalized countries.

Export Performance, Labor Standards and Institutions: Evidence from a Dynamic Panel Data Model

Journal of Labor Research, 2010

I investigate the role of labor standards in international trade. While the literature has used many different measures of labor standards, I use two: the rate of work injuries and the rate of strikes and lockouts — allowing me to construct both measures for 112 countries from 1980 until 2004. This allows dynamic panel data methods to be used in estimation. Three measures of the quality of institutions are also used for the same period: the number of years the chief executive is in office, the concentration of a country’s legislature measured by the Herfindahl-Hirschman Index, and whether the legislature is controlled by a party representing a special interest. The results show that countries with better labor standards and institutions do trade more — their exports to GDP ratio is higher.

Export sophistication and growth: evidence from China

We consider the effect of export sophistication on economic performance using regional variations within a single country (China) over the period 1997-2007. We confirm Hausmann, Hwang and Rodrik (2007)'s prediction that regions that develop more sophisticated goods subsequently grow faster. We find that even at the province and prefecture level, there is substantial variation in export sophistication controlling for the level of development, and that this difference in turns matters for growth. Or results suggest that these gains do not only make sense for locations that export a lot. They are however limited to ordinary export activities undertaken by domestic entities. Direct gains do not appear to derive from foreign entities typically engaged in processing trade even though they are the main contributors to the global upgrading of China's exports.

Export Diversification and Economic Growth : Evidence from Cross-Country Analysis

2010

The present paper investigates the export-growth relationship taking into account both diversification and nature of export composition. In a sample of sixty five countries for the period 1965-2005 the dynamic panel estimation reveals that export diversification and composition are important determinants of economic growth after controlling for the impacts of other variables like lagged growth, exports, investment, and infrastructure. Moreover, the relationship between export concentration and income is found to be nonlinear. These results hold even when the dataset is classified in four sub-panels based on export-economic growth relation establishing their robustness. It is also found that economic growth across countries increases with diversification of export up to a critical level of export concentration which is then reversed with increasing specialization leading to higher growth. These results on export-economic growth relationship have immense implications for growth. JEL C...

Determinant of export diversification

International Journal of Research in Business and Social Science (2147- 4478), 2020

The main objective of this work is to identify the explanatory factors determining the diversification of exports in SADC countries during the period 1990-2018. We regress the indicator of export diversification, measured successively by the Herfindahl-Hirschman index on a set of explanatory variables. Using a next-generation panel data approach is applied, such as panel unit root, panel cointegration, fully modified OLS (FMOLS), and Dynamic Ordinary Least Squares (DOLS). The result of unit root tests for all these variables are stationary at their first difference and integrated of order one. Our results show that there is a long-term relationship between export diversification and GDP, openness to trade, accumulation of human and physical capital, foreign direct investment. All of its variables are the main explanatory factors for the diversification of exports in SADC countries.