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Proceedings of the German Development Economics Conference, 2010 (Hannover) >
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http://hdl.handle.net/10419/39991
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| Title: | | How costly is rent-seeking to diversification: an empirical approach  |
| Authors: | | Starosta de Waldemar, Felipe |
| Issue Date: | | 2010 |
| Series/Report no.: | | Proceedings of the German Development Economics Conference, Hannover 2010 4 |
| Abstract: | | The empirical U-shaped pattern between product diversification and economic development has been widely examined, but here we analyze the determinants of diversification. We find that a high level of rent-seeking activities has a large impact on the diversification of nations: in countries where rent-seeking is a widespread practice, the number of products being exported will be smaller and its value more concentrated in certain goods. Our analysis embraces a large sample of more than 130 countries between 1995 and 2007, using a highly disaggregated export database comprising 5000 products adopting both diversification indices or the number of new products as measures of diversification. To establish this relationship we use a Generalized Method of Moments estimation, controlling for endogeneity originated from reverse causality, and we also use a negative binomial regression to estimate the impact of rent-seeking on new export products. These empirical predictions contribute to the idea that resources allocated to harm diversification are an important binding constraint for developing countries. |
| Subjects: | | Product diversification international trade economic development |
| JEL: | | O11 F1 O31 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Proceedings of the German Development Economics Conference, 2010 (Hannover)
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