Trade dependence, liberalization and exports diversification in developing countries

Abstract, United Nations, 2018

This paper explores the relationship between trade, trade liberalization and exports diversification in developing countries. The paper uses nonparametric and parametric techniques in a sample of 144 developing countries over the period 1970-2015. The non-parametric analyses indicate that countries that are more open to trade tend to have more diversified exports structures than those less open to trade. The results from the panel data estimations suggest that on average, trade and trade liberalization are drivers of exports diversification both in the short and in the long run. The empirical analyses also show that human capital, GDP per capita, institutions, geography and infrastructure play a role in exports diversification.