Determinant of export diversification

Abstract

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.

The Effect of Innovation, Logistic Performance, and Human Capital on Export Diversification of Manufacturing Industry

“…Based on the estimation results, it can be seen that the GDP of the exporting country has the greatest influence on the diversification of exports of high-tech manufactured industrial commodities compared to the intensity of other technologies. This result is supported by research that finds that GDP has a positive and significant effect on export performance and export (Espoir, 2020;Agosin et al, 2012;Xing, 2018;Sekkat, 2016). Research conducted by Espoir (2020) found that GDP contributed positively and significantly to the export diversification process, and export diversification had a positive and significant impact on GDP growth.…”

“…This result is supported by research that finds that GDP has a positive and significant effect on export performance and export (Espoir, 2020;Agosin et al, 2012;Xing, 2018;Sekkat, 2016). Research conducted by Espoir (2020) found that GDP contributed positively and significantly to the export diversification process, and export diversification had a positive and significant impact on GDP growth. The results of this study are also supported by the research of Agosin et al (2012), which states that the GDP growth of an exporter country will be able to assist in the process of developing new sectors in export commodities so that export diversification can be achieved.…”

“…Innovation and creativity are components that make an important contribution to the diversification of the manufacturing industry's commodity exports. Innovation in the production process will increase the added value of finished goods produced, which will then contribute to GDP (Espoir, 2020). Innovations in export diversification also provide additional convenience for new export products to enter the global market.…”

Relationship between economic diversification and CO2 emissions: ARDL-EC modeling in South Africa

“…The TI was ideal because it did not rely on exports, unlike the export diversification index. Furthermore, it considered the complexities within the economy relative to the Herfindahl-Hirshman index and concentrated on the contribution of each sector based on weighted averages relative to the entropy index which assumes an equi-proportional distribution (Bebczuk and Daniel Berrettoni 2006;Espoir 2020;Takada et al 2020). There are 5 steps involved in calculating the TI (Quantec easydata 2021):…”

Impact of Special Economic Zones on Export Diversification in Sub-Saharan Africa

“…No clear-cut expectation can be made about the sign of trade openness. As emphasized by Espoir (2020), on the one hand, Ricardian trade models suggest that openness to trade should lead countries to specialise in their comparative advantage. On the other hand, greater openness to trade may also be associated with less protectionism, which tends to foster the expansion of tradable sectors.…”