Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259488 
Year of Publication: 
2022
Series/Report no.: 
ADB Economics Working Paper Series No. 650
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
Export diversification, or the breadth of exports of an economy, is increasingly seen as a means of accelerating economic growth, mitigating instability due to price, demand, and exchange rate fluctuations, and stabilizing earnings from exports in the long run. As economies integrate into global and regional value chains, the new fragmented production structures may not be adequately reflected in diversification measurements based on gross exports. This paper develops a new indicator of export diversification based on value added in sectors contributing to exports. For most Asia and the Pacific economies, the gross exports approach underestimates export diversification compared to the valueadded approach. Analyzing the trends suggests a strong case for the latter approach to complement the more traditional approach. The relationship between export diversification and growth is complex and is dependent on the diversification indicator and varies by income levels. One general finding is that divergence between diversification in exporting sectors and in sectors contributing to exports narrowed as income levels of economies increased.
Subjects: 
export
value added
diversification
global value chains
JEL: 
C82
F10
F43
F63
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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