Impact of Export Diversification / Specialization on Economic Growth: Evidence from Asian Countries

Abstract

Export led growth strategy has become a major concern of economic policy makers of developing countries to achieve their economic growth objectives. In this respect the export diversification and specialization has become a major concern to achieve higher and sustainable economic growth. The study attempts to find the impact of export diversification and specialization on economic growth of developing countries. The main purpose of this study is to understand the impact of export diversification and specialization on the economic growth in developing countries of the Asian region and to identify the most suitable method to achieve higher economic growth

The export herfindahl concentration index is the main variable used in this study as a proxy to measure the effect of export Diversification and concentration on economic growth. The Study has employed GMM panel estimation method to analyse the data of 33 developing countries in Asian region for the period of 1995 to 2019 at an annual frequency.

The study has found a negative and significant impact between export herfindahl concentration index (H) and the GDPPC growth of the selected developing countries.

In light of the findings it can conclude that the export diversification may lead to higher and sustainable economic growth in developing countries.