Discovery and Development: An Empricial Exploration of "New" Products
The authors use disaggregated export data to explore the relationship between economic discovery and economic development. They find that discoveries, or episodes, when countries begin exporting a new product are not limited to so-called "dyna...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/11/5449492/discovery-development-empricial-exploration-new-products http://hdl.handle.net/10986/14187 |
| Summary: | The authors use disaggregated export
data to explore the relationship between economic discovery
and economic development. They find that discoveries, or
episodes, when countries begin exporting a new product are
not limited to so-called "dynamic" industries.
Rather, they also occur in traditional sectors such as
agriculture. In addition, the data suggest discovery is a
component of the stages of productive diversification that
occur with development, following a consistent
pattern-discovery activity peaks at the lower-middle income
level and then declines. Based on this pattern, the authors
show that discovery in the 1990s occurred with a higher than
expected frequency in Eastern Europe and Central Asia, and
lower than expected frequency in Sub-Saharan Africa.
Discovery is not found to be a product of structural
transformation based on changing factor endowments across
income levels. Beyond export growth, population, and
development, there are no significant and positive
relationships between the expected drivers of
entrepreneurship and the frequency of discovery. Combined
with the finding that higher absorptive capacity and lower
barriers to entry are associated with a reduction in
discovery, this suggests that market failures arising from
imitation and free-riding may be inhibiting the emergence of
new export products in developing countries. |
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