Watching More Than the Discovery Channel : Export Cycles and Diversification in Development

This paper examines the export performance of 99 countries over 1995-2004 to understand the relative roles of export growth through "discovery" of new products and growth during post-discovery phases of the export product cycle -- acceleration and maturation -- in existing markets and expansion into new geographic markets. The authors find that expanding existing products in existing markets (growth at the intensive margin) has greater weight in export growth than diversification into new products and new geographic markets (growth at the extensive margin). Moreover, growth into new geographic markets appears to be more important than discovery of new export products in explaining export growth. Of particular importance is whether an exporting country succeeds in reaching more national markets that are already importing the product it makes. This geographic index of market penetration is a powerful explanatory variable of export performance. This suggests that governments should not focus solely or even primarily on the discovery channel, but also seek to identify and address market failures that are constraining exporters in subsequent phases of the export cycle.

Bibliographic Details

Main Authors:	Brenton, Paul, Newfarmer, Richard
Language:	English
Published:	World Bank, Washington, DC 2007-08
Subjects:	ACCESS TO TECHNOLOGY, ACCOUNTING, AGGREGATE EXPORTS, AVERAGE TARIFFS, BANK POLICY, BARRIERS TO COMPETITION, BARRIERS TO ENTRY, BILATERAL TRADE, BUSINESS CLIMATE, BUSINESS ENVIRONMENT, CAPITAL GOODS, CARTEL, COMMODITY, COMPETITIVENESS, DATA AVAILABILITY, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPING COUNTRY MARKETS, DEVELOPING ECONOMIES, DEVELOPMENT ECONOMICS, DOMESTIC DEMAND, DOMESTIC MARKET, ECONOMIC DEVELOPMENT, ECONOMIC SIZE, ECONOMIES OF SCALE, EXPORT DIVERSIFICATION, EXPORT GROWTH, EXPORT MARKET, EXPORT MARKET SHARE, EXPORT MARKETS, EXPORT OPPORTUNITIES, EXPORT PERFORMANCE, EXPORT PROCESSING, EXPORT PROCESSING ZONES, EXPORT SECTORS, EXPORTER, EXPORTERS, EXPORTS, FACTOR MARKETS, FIXED COSTS, FOREIGN MARKET, GDP, GDP PER CAPITA, GEOGRAPHIC DIVERSIFICATION, GEOGRAPHIC MARKETS, GLOBAL COMPETITION, GLOBAL ECONOMIC PROSPECTS, GLOBAL ECONOMY, GLOBAL IMPORTS, GLOBAL MARKETS, GLOBALIZATION, GOVERNMENT INTERVENTION, IMPACT OF TRADE, IMPORT MARKETS, INCOME, INCOME GROUP, INCOME GROUPS, INCOME VOLATILITY, INDUSTRIAL POLICIES, INFORMATIONAL ASYMMETRIES, INTERMEDIATE INPUTS, INTERNATIONAL BANK, INTERNATIONAL INVESTMENT, INTERNATIONAL MARKETS, INTERNATIONAL TRADE, LABOR MARKET, LABOR MARKET POLICIES, LDCS, LOCAL MARKET, LOW-INCOME COUNTRIES, MARGIN ACCOUNTS, MARGINAL COST, MARGINAL COSTS, MARKET ACCESS, MARKET ENTRY, MARKET FAILURE, MARKET FAILURES, MARKET IMPERFECTIONS, MARKET INFORMATION, MARKET PENETRATION, MARKET REGULATIONS, MARKET SHARE, MARKETING, MIDDLE EAST, MIDDLE INCOME COUNTRIES, MIDDLE-INCOME COUNTRIES, MONOPOLIES, NEW MARKET, NEW MARKETS, NEW PRODUCT, NEW PRODUCTS, NORTH AFRICA, OIL EXPORTERS, OUTPUT, PATTERNS OF TRADE, PER CAPITA INCOME, PER CAPITA INCOMES, PORTFOLIO, POTENTIAL DEMAND, PRODUCTIVITY, PRODUCTIVITY GROWTH, RAPID GROWTH, RETURNS, SALES, SERVICES MARKETS, SPECIALIZATION, SUPPLIERS, TAX, TELECOMMUNICATIONS, TERMS OF TRADE, TERMS OF TRADE SHOCKS, THIRD MARKETS, TRADE COSTS, TRADE DATA, TRADE FLOWS, TRADE OPENNESS, TRADE REGIME, TRADE RELATIONSHIPS, TRADE VOLUMES, TRANSPORT COSTS, TRINIDAD AND TOBAGO, TURNOVER, VALUE OF EXPORTS, VALUE OF IMPORTS, VOLATILITY, WEALTH, WORLD TRADE, WORLD TRADE ORGANIZATION,
Online Access:	http://documents.worldbank.org/curated/en/2007/08/8021306/watching-more-discovery-channel-export-cycles-diversification-development https://hdl.handle.net/10986/7493
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