Employment and export specialisation along the development path: some robust evidence

Abstract

This paper contributes to the literature on the evolution of overall specialisation along the process of economic development by simultaneously estimating 'specialisation curves' emerging from fully comparable employment and export statistics in a sample of 32 economies . We apply semiparametric estimation methods, which allow us to combine the flexibility of the estimation with the inclusion of country-specific effects, demonstrating that their omission can be the source of contradictions in nonparametrically revealed patterns of diversification along the path of growth. We find no strong support for a U-shaped pattern (which is very sensitive to the methodological setting applied) but rather a robust tendency towards manufacturing despecialisation in the initial phase of economic growth that is confirmed both by export and employment specialisation patterns.

Margins, Gravity, and Causality: Export Diversification and Income Levels Reconsidered

“…9 Note that this is also supported by De Benedictis et al's (2009) andParteka's (2010) findings of continuous diversification when they use relative measures of specialization because they incorporate time effects by construction.…”

“…10 Although Parteka (2010) finds that concentrations in production and employment do not necessarily move together, this must be the true for the extensive margin, where relative quantities are neglected and production requires at least a small unit of labor. …”

“…An almost identical pattern has been identified by Cadot, Carrère, and Strauss-Kahn (2011) Theil's (1972) entropy measure to identify the extensive margin as the relevant dimension where diversification and respecialization occurs. 2 Skepticism concerning the robustness of these patterns is raised in the studies of Benedictis, Gallegati, and Tamberi (2009) and Parteka (2010). They extend the nonparametric approach by implementing country-fixed effects into their analysis and find that, depending on which measure is used, respecialization can no longer be observed.…”

“…They extend the nonparametric approach by implementing country-fixed effects into their analysis and find that, depending on which measure is used, respecialization can no longer be observed. The focus of their studies, however, is the distinction of absolute diversification (as the deviation from a normal distribution) and relative diversification in comparison to other countries (Benedictis et al 2009), and the co-movement of specialization patterns in exports and employment (Parteka 2010).…”

The Roots of Export Diversification

“…2 By using the HHI as a measurement for export diversification, we follow the vast majority of previous analyses (e.g. Imbs and Wacziarg, 2003, Parteka, 2010, Wiig and Kolstad, 2012, Agosin et al, 2012, or Cadot et al, 2011. Please also see section 4.1 for more information on why we choose the HHI.…”