Advertisement

Journal of Evolutionary Economics

, Volume 18, Issue 2, pp 201–218 | Cite as

Export variety and the economic performance of countries

  • Pier Paolo SaviottiEmail author
  • Koen Frenken
Regular Article

Abstract

We explore the relationship between export variety and economic development, using data on OECD countries between 1964 and 2003. We show that structural change in the world economy has a particular arrow of time leading to a growing variety of exports. Distinguishing between related variety (within sectors) and unrelated variety (variety between sectors), we also show that related variety stimulates growth instantaneously, while unrelated variety only promotes growth with a considerable time lag. This finding is in line with the evolutionary notions that economic development and international trade patterns are path dependent.

Keywords

Related variety Unrelated variety Economic development Trade Path dependence 

JEL Classification

B25 F10 O11 O19 O30 O49 

Notes

Acknowledgment

Comments by Frank Neffke are gratefully acknowledged. All errors remain ours.

References

  1. Aghion P, Howitt P (1992) A model of growth through creative destruction. Econometrica 60(2):323–351CrossRefGoogle Scholar
  2. Aghion P, Howitt P (1998) Endogenous growth theory. MIT Press Cambridge, MAGoogle Scholar
  3. Aghion P, Howitt P (2005) Appropriate growth policy: a unifying framework, lecture, XXth Annual Congress of the European Economic Association, Amsterdam, August 25, http://post.economics.harvard.edu/faculty/aghion/papers.html
  4. Attaran M (1986) Industrial diversity and economic performance in U.S. areas. Ann Reg Sci 20:44–54CrossRefGoogle Scholar
  5. Breschi S, Lissoni F, Malerba F (2003) Knowledge relatedness in firm technological diversification. Res Pol 32(1):69–87CrossRefGoogle Scholar
  6. Bryce B, Winter S (2006) A general inter-industry relatedness index, Working Paper 06–31, Center for Economic Studies, U.S. Census BureauGoogle Scholar
  7. Cornwall J (1977) Modern capitalism: its growth and transformation. Martin Robertson, LondonGoogle Scholar
  8. Dixit AK, Stiglitz JE (1977) Monopolistic competition and optimum product diversity. Am Econ Rev 67:297–308Google Scholar
  9. Edquist C (ed) (1997) Systems of innovation: technologies, institutions and organizations. Pinter, LondonGoogle Scholar
  10. Fagerberg J (2000) Technological progress, structural change and productivity growth: a comparative study. Struct Chang Econ Dyn 11(4):393–411CrossRefGoogle Scholar
  11. Fagerberg J, Verspagen B (2002) Technology-gaps, innovation diffusion and transformation: an evolutionary interpretation. Res Pol 31:1291–1304CrossRefGoogle Scholar
  12. Freeman C (1987) Technology policy and economic performance: lessons from Japan. London, PinterGoogle Scholar
  13. Frenken K (2007) Entropy statistics and information theory. In: Hanusch H, Pyka A (eds) The Elgar companion to Neo-Schumpeterian economics. Edward Elgar, Cheltenham, UK and Northampton MA, pp 544–555Google Scholar
  14. Frenken K, Boschma RA (2007) A theoretical framework for evolutionary economic geography: industrial dynamics and urban growth as a branching process. J Econ Geogr 7(5):635–649CrossRefGoogle Scholar
  15. Frenken K, Saviotti PP, Trommetter M (1999) Variety and niche creation in aircraft, helicopters, motorcycles and microcomputers. Res Pol 28:469–488CrossRefGoogle Scholar
  16. Frenken K, van Oort FG, Verburg T (2007) Related variety, unrelated variety and regional economic growth. Reg Stud 41(5):685–697CrossRefGoogle Scholar
  17. Funke M, Ruhwedel R (2001a) Product variety and economic growth: Empirical evidence for the OECD countries, IMF Staff papers, 48, No. 2Google Scholar
  18. Funke M, Ruhwedel R (2001b) Export variety and export performance: empirical evidence from East Asia. J Asian Econ 12:493–505CrossRefGoogle Scholar
  19. Funke M, Ruhwedel R (2005) Export variety and economic growth in East European transition economies. Econ Transit 13(1):25–50CrossRefGoogle Scholar
  20. Grabher G (1993) The weakness of strong ties: the lock-in of regional development in the Ruhr area. In: Grabher G (ed) The Embedded Firm. Routledge, London, pp 255–277Google Scholar
  21. Hausmann R, Hwang J, Rodrik D (2005) What you export matters, KSG Working Paper No. RWP05–063, Harvard UniversityGoogle Scholar
  22. Helpman E (2004) The mystery of economic growth. Harvard University Press, Cambridge MassGoogle Scholar
  23. Hidalgo CA, Klinger B, Barabasi A-L, Hausmann R (2007) The product space conditions the development of nations. Science 317(5837):482–487CrossRefGoogle Scholar
  24. Jacquemin AP, Berry CH (1979) Entropy measure of diversification and corporate growth. J Ind Econ 27:359–369CrossRefGoogle Scholar
  25. Krugman PR (1993) Lessons of Massachusetts for EMU. In: Torres F, Giavazzi F (eds) Adjustment and Growth in the European Monetary Union. Cambridge University Press, Cambridge, pp 241–269Google Scholar
  26. Kuznets S (1965) Economic growth and structure. Norton, New YorkGoogle Scholar
  27. Lancaster KJ (1975) Socially optimal product differentiation. Am Econ Rev 65:567–585Google Scholar
  28. Landes D (1998) The wealth and poverty of nations. Norton, New YorkGoogle Scholar
  29. Lundvall BA (ed) (1992) National systems of innovation. Pinter, LondonGoogle Scholar
  30. Montgomery CA (1994) Corporate diversification. J Econ Perspect 8:163–178Google Scholar
  31. Nelson RR (1995) Co-evolution of industry structure, technology and supporting institutions, and the making of comparative advantage. Int J Econ Bus 2(2):171–184CrossRefGoogle Scholar
  32. Nesta LJJ, Saviotti PP (2005) Coherence of the knowledge base and the firm’s innovative performance: evidence from the US pharmaceutical industry. J Ind Econ 53:105–124Google Scholar
  33. Nesta LLJ, Saviotti PP (2006) Firm knowledge and market value in biotechnology. Ind Corp Change 15:625–652CrossRefGoogle Scholar
  34. North DC (1990) Institutions, institutional change and economic performance. Cambridge University Press, CambridgeGoogle Scholar
  35. Pasinetti LL (1981) Structural change and economic growth. Cambridge University Press, CambridgeGoogle Scholar
  36. Pasinetti LL (1993) Structural economic dynamics. Cambridge University Press, CambridgeGoogle Scholar
  37. Romer P (1990) Endogenous technical progress. J Polit Econ 98:71–102CrossRefGoogle Scholar
  38. Salter WEG (1960) Productivity and technical change. Cambridge University Press, CambridgeGoogle Scholar
  39. Saviotti PP (1996) Technological evolution, variety and the economy. Edward Elgar, AldershotGoogle Scholar
  40. Saviotti PP (2003) On the policy implications of variety growth for developing and industrializing countries. In: Cassiolato JE, Lastres HMM, Maciel ML (eds) Systems of innovation and development, evidence from Brazil. Edward Elgar, CheltenhamGoogle Scholar
  41. Saviotti PP, Pyka A (2004) Economic development by the creation of new sectors. J Evol Econ 14(1):1–35CrossRefGoogle Scholar
  42. Schumpeter J (1934) The Theory of Economic Development. Mass, Harvard University Press, Cambridge original edition 1912Google Scholar
  43. Teece DJ, Rumelt R, Dosi G, Winter S (1994) Understanding corporate coherence: Theory and evidence. J Econ Behav Organ 23(1):1–30CrossRefGoogle Scholar
  44. Theil H (1972) Statistical decomposition analysis. North Holland, AmsterdamGoogle Scholar
  45. Weitzman M (1998) Recombinant growth. Q J Econ 113(2):331–360CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  1. 1.UMR GAELUniversité Pierre Mendés-FranceGrenoble, Cedex 9France
  2. 2.GREDEG, CNRS, UNSAValbonneFrance
  3. 3.Urban and Regional Research Centre Utrecht (URU), Section of Economic Geography, Faculty of GeosciencesUtrecht UniversityUtrechtThe Netherlands

Personalised recommendations