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Diversification, growth, and volatility in Asia (English)

Economic development critically involves diversification and structural transformation—that is, the continued, dynamic reallocation of resources from less productive to more productive sectors and activities. This paper documents that, over an extended period, developing Asia has on average been particularly successful in diversifying its exports, particularly in comparison with Sub-Saharan Africa. Much of the progress has occurred through diversification along the ‘extensive margin,’ that is, through entry into completely new products. In addition, developing Asia has on average benefited significantly from quality upgrading, helping it capitalize on already existing comparative advantages. Yet, agricultural and natural resources tend to have lower potential for quality upgrading than manufactures. Therefore, for lower-income “frontier” countries, diversification into products with longer “quality ladders” may be a necessary first step before large gains from quality improvement can be reaped.

Details

  • Author

    Papageorgiou,Chris, Spatafora,Nikola L., Wang,Ke

  • Document Date

    2015/07/28

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS7380

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Asia,

  • Region

    South Asia, East Asia and Pacific,

  • Disclosure Date

    2015/07/28

  • Disclosure Status

    Disclosed

  • Doc Name

    Diversification, growth, and volatility in Asia

  • Keywords

    gross domestic product per capita;early stage of development;Commonwealth of Independent States;diversification of export;access to foreign exchange;Cost of Doing Business;generalized system of preference;types of reforms;structure of production;access to finance;reallocation of resource;quality of infrastructure;country case study;adverse external shocks;standard growth determinant;multivariate regression approach;global supply chain;human capital needs;natural resource abundance;preferential trade agreement;bilateral trade flow;per capita basis;direction of trade;price of export;external trade;comparative advantage;selection bias;production cost;trade diversification;export quality;domestic production;asian countries;International Trade;trade partner;Product Diversification;individual products;survival rate;product quality;quality improvement;trade price;cross-country variation;quality measure;economic diversification;fixed effect;external condition;external environment;export share;Export Diversification;export price;foreign investor;business service;gravity equation;macroeconomic stabilization;ongoing work;output growth;productive sector;domestic economy;Macroeconomic Stability;export concentration;labor-intensive sectors;shipping cost;price index;factor endowment;trade costs;domestic price;trade determinants;income increase;estimation equation;reducing barriers;credit provision;disturbance term;indicator variable;common language;export value;Real estate;food processing;light industry;high probability;contract enforcement;fishery service;high concentration;retail trade;products export;production structure;middle-income economy;macroeconomic implication;Learning and Innovation Credit;underdeveloped area;Borrowing Countries;industrial statistic;industrial concentration;e-mail address;traditional products;export revenue;Natural Resources;primary commodity;productivity growth;constant dollar;data limitation;Population Growth;standard error;international economics;labor statistic;land-use rights;cash crop;forestry product;oil sector;labor employment;subsequent growth;domestic environment;lowering barrier;export market;oil exporter;internal consistency;destination market;manufacturing sector;labor use;sectoral allocation;rationing system;trading partner;dynamic process;macroeconomic instability;higher growth;manufactured export;macroeconomic performance;output decline;output volatility;high-quality variety;regression results;colonial relationship;trade value;relative distance;saharan africa;open access;external factor;common colonizer;development policy;garment industry;

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Citation

Papageorgiou,Chris Spatafora,Nikola L. Wang,Ke

Diversification, growth, and volatility in Asia (English). Policy Research working paper,no. WPS 7380 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/271261467986248043/Diversification-growth-and-volatility-in-Asia