Economic Benefits of Export Diversification in Small States

By Arnold McIntyre, Mike Xin Li, Ke Wang, Hanlei Yun

April 11, 2018

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Format: Chicago

Arnold McIntyre, Mike Xin Li, Ke Wang, and Hanlei Yun. Economic Benefits of Export Diversification in Small States, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The paper considers concepts of economic diversification with respect to exports (including service sectors) for small states. We assessed the economic performance of different groups of 34 small states over the period of 1990-2015 and found those more diversified experienced lower output volatility and higher average growth than most other small states. Our findings are consistent with conventional economic theories but we found that export diversification has a more significant impact on reducing output volatility than improving long run growth in small states. Diversification requires fundamental changes and should be contemplated in the context of a cohesive development strategy.

Subject: Comparative advantage, Economic sectors, Export diversification, Export earnings, Exports, International trade, Tourism

Keywords: Caribbean, Center, Comparative advantage, Digit export goods, Diversification, Diversification measure, Economic growth, Export basket, Export diversification, Export earnings, Export earnings instability, Export markets diversification, Exports, Global, Growth volatility, Small states, Tourism, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/086
Stock No:

WPIEA2018086
ISBN:

9781484351017
ISSN:

1018-5941

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