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This study investigates the effect of multilateral trade liberalization on services export diversification with a view to complementing the recently published work on the effect of multilateral trade liberalization on export product diversification.

The empirical exercise been performed using a panel dataset of 133 countries over the period 1995–2014.

The findings show that multilateral trade liberalization is associated with greater services export diversification in both developed and developing countries alike. This is particularly the case in countries with a high reliance on manufactured goods exports or those that enjoy greater export product diversification. Interestingly, multilateral trade liberalization enhances services export diversification in countries that experience higher foreign direct investment inflows.

These findings highlight the importance of multilateral trade liberalization for services export diversification. The study has considered explicitly supply-side factors that could affect services export diversification. This is because the indicator of multilateral trade liberalization is highly correlated with some demand-side factors, such as the world demand for services exports. Therefore, another avenue for future research could involve looking at the demand side factors that could influence services export diversification, and whether the degree of multilateral trade liberalization matters for the influence of these demand factors on services export diversification.

The current study through its positive effect on both export product diversification and services export diversification, greater cooperation among World Trade Organization (WTO) Members on trade matters could help revive economic growth, particularly in the current COVID-19 pandemic that has significantly plummeted it.

To the best of our knowledge, this is first study that has investigated this issue.

This study investigates empirically the impact of export product concentration (or diversification) on social protection expenditure in both developed and developing countries. The analysis further explores whether this effect depends on countries' degree of openness to international trade.

The analysis has relied on an unbalanced panel data set comprising 112 countries over the period 1980–2010 and used the two-step system generalized methods of moments (GMM) estimator as the econometric approach.

The empirical analysis conveys two messages. First, low-income countries experience a positive effect of export product concentration on social protection expenditure, while for relatively advanced economies, export product diversification positively influences social protection expenditure. Second, countries that further open up their economies to international trade experience a positive effect of export product diversification on social protection expenditure, with the magnitude of this impact increasing as the degree of openness rises.

These findings highlight the relevance of export product diversification for social protection expenditure in both developed and developing countries, notably in the context of greater trade openness.

The diversification of export products is one means for developed and developing countries alike to increase the scope for social protection expenditure.

To the best of the authors' knowledge, this topic had not been addressed.

The international trade literature has established that export product diversification lowers export product revenue instability. The current analysis investigates whether this finding carries over services exports.

The empirical analysis covers a sample of 152 countries over the period 1980–2014 and employs the two-step system generalized method of moments (GMM) approach.

The empirical findings indicate that services export diversification reduces services export revenue instability both over the full sample as well as over sub-samples of high-income countries (HICs), least developed countries (LDCs) as well as developing countries (i.e. non-HICs) that are not LDCs. HICs appear to experience a higher positive effect of services export diversification on services export revenue instability than in developing countries. The analysis also shows that countries that further open-up to international trade enjoy a greater reducing effect of services export diversification on the instability of services export revenue.

This analysis, therefore, adds to the existing studies on the relationship between export product diversification and the instability of revenue derived from goods exports by focusing on the services export side. An important message from the analysis is that countries that diversify their services export basket enjoy lower services export revenue instability when they further integrate into the world trade market.

This study highlights the importance of services export diversification, including for stabilizing services export revenue to services traders. Diversifying services export items, including across traditional and modern services sectors involves the implementation of a wide range of policies and measures, of which the liberalization of the services sectors through reduction and eventually the elimination of services trade barriers; the improvement of the business environment and the development of domestic financial markets (see for example, Hoekman, 2017). It could be interesting that another study consider policies and measures that could promote services export diversification.

To the best of the authors’ knowledge, this is the first time this topic is being addressed, including empirically.

The purpose of this study is to explore the effect of economic complexity on services export diversification. This study has been built on two arguments. The first one draws from Eichengreen and Gupta (2013b) and states that countries that export complex products would have a high penetration in the international goods market and establish a network that could be exploited to expand their range of services export items. Second, by inducing higher inflows of foreign direct investment (FDI), greater economic complexity could contribute to fostering services export diversification.

The empirical analysis uses a panel data set of 109 countries (both developed and developing countries) over the period of 1985–2014, and in particular, non-overlapping sub-periods of five-year average data. Building on the two-step system Generalized Method of Moments, the empirical analysis has provided support for the above-mentioned two theoretical hypotheses.

The findings indicate that greater economic complexity has been associated with a higher level of services export diversification, and the magnitude of this positive effect is higher for high-income countries than for developing countries. Furthermore, the share of FDI inflows (in percentage of gross domestic product) matters for the effect of economic complexity on services export diversification. Specially, economic complexity exerts a higher positive effect on services export diversification, as the share of net FDI inflows in gross domestic product increases.

From a policy perspective, the analysis complements previous works on the effects of economic complexity (e.g. on economic growth, income inequality, poverty, etc.), by showing that economic complexity also matters for fostering the diversification of countries' services export items. Enhancing economic complexity should be at the heart of policymakers' agenda, both at the national and international levels, given its strong positive effect on macroeconomic aggregates, including on services export diversification, the latter being also an important engine for economic growth (Anand et al., 2012; Gnangnon, 2021a; Mishra et al., 2011; Stojkoski et al., 2016).

This study opens an avenue for future research on whether services export diversification influences economic complexity. One avenue for future research could also be to explore the effect of comparative advantage on goods and services (using the Balassa's revealed comparative advantage index) on services export diversification. Future works could also examine how economic complexity affects different categories of services sectors, including traditional services and modern services.

To the best of the author’s knowledge, this study is the first to address this topic in the literature.

Export product concentration is common in developing nations, where raw materials and semi-manufactured commodities face rigid demand in international markets. This leads to the monopolisation of exports, particularly when targeting the developed world. Association of Southeast Asian Nations (ASEAN) and South Asian Association for Regional Cooperation (SAARC) nations have prioritised diversification to boost exports and per capita income, globalising their economies. The normalised Hirschman index is employed to analyse the determinants influencing the diversification of exports in ASEAN and SAARC countries from 2018 to 2021. Except for the fuel intensity variable, the results show that structural transformation, competitive advantages, industrial sector expansion, institutional capability, local investment development, financial stability and overall economic performance positively promote export diversification intensity. The key result is that institutional strength helps nations rapidly diversify their exports, highlighting the importance of structural transformation in boosting exports and globalising economies.

The purpose of this paper is to analyze the impact of export composition (diversification or specialization) on economic growth of South Asian countries, while export diversification is further categorized into horizontal and vertical export diversification.

The study uses Cobb-Douglas production function, in which export is augmented in the production function. To analyze the non-linear relationship (inverted U- or U-shape) with economic growth, square term of exports Herfindahl index, horizontal, and vertical export diversification are introduced in the model. Panel data of four countries of South Asia, i.e. Bangladesh, India, Pakistan and Sri Lanka is utilized from 1990 to 2013 at annual frequency under fixed effect model.

Exports Herfindahl index represented inverted U-shape relationship with economic growth. An increase in export diversification lead to higher economic growth initially, however, after the threshold level, export specialization have positive impact on economic growth. Horizontal export diversification is not beneficial for economic growth initially, however, after the threshold level, introducing new sector increases economic growth in South Asian countries. Vertical export diversification has insignificant and U-shaped relationship with economic growth.

Education and skill formation are essential components for creativity and innovation, therefore attention must be paid toward labor training and education. Government must encourage the exporters to increase diversification in their export portfolio as well as provide incentives and technical assistance for research and development in the manufacturing sector.

This study contributes by analyzing the non-linear relationship between export composition, i.e. diversification (horizontal and vertical) or specialization and economic growth in South Asian countries. The study is useful to boost the potential level of exports on sustainable economic growth of South Asian countries. This study provides the essential evidence, information and better understanding to key stakeholders of exports.

This study aims to examine whether diversified economies enhance the growth benefits from foreign direct investment (FDI). Diversified economies benefit from stable export earnings, stable investment composition and greater factor endowments through forward and backward linkages that can leverage superior foreign technology embedded in FDI. This is crucial as many African economies suffer from dependency while FDI is concentrated in the primary sector.

The authors use a dataset of 15 Economic Community of West African States from 1995 to 2020 and compile variables from various sources, including an export diversification index measured using the Herfindahl–Hirschman index of product concentration. The authors use a growth regression model estimated using dynamic panel estimators to control for endogeneity and simultaneity issues.

The results show that the effects of direct FDI are insignificant to growth considering diversification and controlling for other confounding factors. Meanwhile, diversification is associated with growth, which highlights the importance of industrial policy. More importantly, the authors find that the marginal effects of FDI are positively and significantly associated with growth when diversification levels are low, implying that production structure matters for the FDI–growth nexus in developing economies.

Previous studies have overlooked the role of export production structure on the FDI–growth nexus. Many developing economies are dependent on primary exports and suffer from dependency, which implies lower levels of factor endowments. As such, this reduces the growth gains from FDI. The authors provide new empirical evidence on the importance of export production structure on the FDI–growth nexus.

This paper aims to empirically analyze the impact of export diversification on gross domestic product (GDP) per capita growth.

Using system generalized method of moments (GMM), a nonlinear model in a dynamic panel data growth framework for 101 countries between 1995 and 2019 was estimated.

Results evidenced that export concentration, measured by the Herfindahl–Hirschman Index (HHI), is negatively associated with GDP per capita growth after controlling for the effects of other explanatory variables. Further, the squared term of HHI used in the model to measure the nonlinear relationship between export concentration and economic growth indicated that the low-income and lower-middle-income countries benefited from export diversification. At the same time, high-income and upper-middle-income countries perform well with their export specialization. The results of the robustness check validate the findings of nonlinear estimation.

The findings recommend that low-income and lower-middle-income countries diversify their export basket to improve economic growth by generating stable export earnings. Similarly, high-income and upper-middle-income countries should focus on measures to close the product lines which no longer belong to their factor endowments and rebalance their export basket.

This study contributes to the existing literature by using the system GMM method, which is most appropriate for a dynamic panel data growth framework with up-to-date data. Further, this study segregates a large panel into 43 concentrated and 58 diversified countries to test the robustness of the empirical results.

The purpose of this paper is to examine the impact of operational stickiness on product quality. Particularly, it analyzes the moderating effect of product diversification on the relationship between operational stickiness and product quality of exporting firms from China.

Using a sample of 3,567 exporting firms between 2002 and 2012 in China, this paper develops a fixed effect model to demonstrate the nonlinear relationship between operational stickiness and product quality.

Results show that operational stickiness has an inverted U-shaped impact on product quality, while inventory stickiness, property, plant and equipment (PPE) stickiness and labor stickiness are used to measure operational stickiness. Furthermore, the impact of operational stickiness on product quality is found to be moderated by product diversification.

Managers can achieve an optimal level of product quality by adjusting the level of operational stickiness. Firms with excessive operational stickiness should appropriately reduce the degree of stickiness to improve product quality. Besides, managers who focus on product quality should be cautious in adopting the product diversification strategy and be wary of the loss of product quality this strategy may cause.

This paper is the first study that has empirically validated the inverted U-shaped relationship between operational stickiness and product quality, and confirmed the moderating effect of product diversification on the relationship between operational stickiness and product quality. It provides a new idea to improve product quality by operational management.

The relationship between real exchange rate and services export diversification is at the heart of this study.

The analysis is performed using a sample of 113 countries over the period 1985–2014, and the 2-step system Generalized Method of Moments (GMM) approach. The analysis uses both the Theil index and Herfindahl–Hirschman index of services export concentration.

The analysis shows that over the full sample, the real effective exchange rate appreciation induces a greater services export diversification. This outcome applies to high-income countries and developing countries. However, the positive effect of the appreciation of the real exchange rate on services export concentration is lower in least developed countries than in other countries. Finally, the effect of the appreciation of the real exchange rate on services export concentration in tax haven countries depends on the indicator of services export concentration, as this is positive for the Theil index and negative for the Herfindahl–Hirschman index of services export concentration.

These findings highlight the strong influence of real exchange policies on countries' path of services export diversification.

To the best of the authors' knowledge, this topic is being addressed in the empirical literature for the first time.