This figure appears in the second chapter of my dissertation. It plots the growth in export quality (to the US) by level of development, measured byPCGDP. Export growth is measured as export quality, across all goods (excluding homogenous goods), regressed on a trend (controlling for country-product fixed effects). 95% confidence intervals are also plotted. The figure illustrates two messages. First, lower income countries do experience fast growth in export quality that is on par with the richest set of countries. This is suggestive of a catch-up phenomenon where lower-income countries are imitating existing varieties and developed nations are devoting resources to innovation.
However, the variance in quality upgrading across countries generally declines as the level of development increases. The confidence intervals on the trends become narrower as one moves towards the right of the graph. So while some LICs may experience similar quality growth relative to richer counterparts, their ascent up the quality ladder is far more sporadic. Two exceptions are India and China.
Dani Rodrik talks about specialization and economic development in his post today.
No comments:
Post a Comment