Export Discoveries, Diversification and Barriers to Entry

The literature on the relationship between economic diversification and development established that diversification rises with development up to a point. Some have argued that market failures reduce private investments that are necessary to find out whether a new product can be exported profitably,...

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Main Authors:	Klinger, Bailey, Lederman, Daniel
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Trade Policy International Trade Organizations F130 Country and Industry Studies of Trade F140 Technological Change: Choices and Consequences Diffusion Processes O330
Online Access:	http://hdl.handle.net/10986/4637

id	okr-10986-4637
recordtype	oai_dc
spelling	okr-10986-46372021-04-23T14:02:18Z Export Discoveries, Diversification and Barriers to Entry Klinger, Bailey Lederman, Daniel Trade Policy International Trade Organizations F130 Country and Industry Studies of Trade F140 Technological Change: Choices and Consequences Diffusion Processes O330 The literature on the relationship between economic diversification and development established that diversification rises with development up to a point. Some have argued that market failures reduce private investments that are necessary to find out whether a new product can be exported profitably, thus implying that the threat of entry can reduce export discoveries and consequently hamper diversification. In parallel, the trade literature on the "extensive margin" of trade has focused on the role of fixed costs of exporting, which affects the number and types of firms that enter into exporting activities. This article presents data suggesting that export diversification and export discoveries are correlated over the course of development, and it provides an empirical test of market failures that might deter export discoveries. The findings suggest that the threat of entry by imitators reduces the number of export discoveries within countries and industries for a given rate of growth of non-discovery exports. However, this market-failure effect is less pronounced when allowing for inter-industry spillovers, whereby export discoveries in one industry lead to discoveries in another industry. The policy implication is that barriers to entry should not be used to protect innovators from the threat of imitation, but governments could consider interventions that directly focus on stimulating export discoveries. 2012-03-30T07:28:58Z 2012-03-30T07:28:58Z 2011 Journal Article Economic Systems 09393625 http://hdl.handle.net/10986/4637 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Trade Policy International Trade Organizations F130 Country and Industry Studies of Trade F140 Technological Change: Choices and Consequences Diffusion Processes O330
spellingShingle	Trade Policy International Trade Organizations F130 Country and Industry Studies of Trade F140 Technological Change: Choices and Consequences Diffusion Processes O330 Klinger, Bailey Lederman, Daniel Export Discoveries, Diversification and Barriers to Entry
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	The literature on the relationship between economic diversification and development established that diversification rises with development up to a point. Some have argued that market failures reduce private investments that are necessary to find out whether a new product can be exported profitably, thus implying that the threat of entry can reduce export discoveries and consequently hamper diversification. In parallel, the trade literature on the "extensive margin" of trade has focused on the role of fixed costs of exporting, which affects the number and types of firms that enter into exporting activities. This article presents data suggesting that export diversification and export discoveries are correlated over the course of development, and it provides an empirical test of market failures that might deter export discoveries. The findings suggest that the threat of entry by imitators reduces the number of export discoveries within countries and industries for a given rate of growth of non-discovery exports. However, this market-failure effect is less pronounced when allowing for inter-industry spillovers, whereby export discoveries in one industry lead to discoveries in another industry. The policy implication is that barriers to entry should not be used to protect innovators from the threat of imitation, but governments could consider interventions that directly focus on stimulating export discoveries.
format	Journal Article
author	Klinger, Bailey Lederman, Daniel
author_facet	Klinger, Bailey Lederman, Daniel
author_sort	Klinger, Bailey
title	Export Discoveries, Diversification and Barriers to Entry
title_short	Export Discoveries, Diversification and Barriers to Entry
title_full	Export Discoveries, Diversification and Barriers to Entry
title_fullStr	Export Discoveries, Diversification and Barriers to Entry
title_full_unstemmed	Export Discoveries, Diversification and Barriers to Entry
title_sort	export discoveries, diversification and barriers to entry
publishDate	2012
url	http://hdl.handle.net/10986/4637
_version_	1764392206709293056

Export Discoveries, Diversification and Barriers to Entry

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