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Relatedness and diversification in the European Union (EU-27) and European Neighbourhood Policy countries

Boschma, Ron LU and Capone, Gianluca (2016) In Environment and Planning C: Government and Policy 34(4). p.617-637
Abstract

This paper analyzes the process of industrial diversification in the countries that were part of the European Union (EU-27) and those that were the target of the European Neighbourhood Policy (ENP) in the period 1995–2010 by means of world trade data derived from the BACI database (elaborated UN Comtrade data). Our results show that in both the EU-27 and the ENP countries, the evolution of the productive structure—as proxied by the export mix—is strongly path-dependent: countries tend to keep a comparative advantage in products that are strongly related to their current productive structure, and they also diversify in nearby products. However, this effect is much stronger for ENP countries, signalling their lower resources and... (More)

This paper analyzes the process of industrial diversification in the countries that were part of the European Union (EU-27) and those that were the target of the European Neighbourhood Policy (ENP) in the period 1995–2010 by means of world trade data derived from the BACI database (elaborated UN Comtrade data). Our results show that in both the EU-27 and the ENP countries, the evolution of the productive structure—as proxied by the export mix—is strongly path-dependent: countries tend to keep a comparative advantage in products that are strongly related to their current productive structure, and they also diversify in nearby products. However, this effect is much stronger for ENP countries, signalling their lower resources and capabilities to diversify in products that are not very related to their productive structure. We also show that the future export structures of countries are affected by their imports: both the EU-27 and ENP countries keep a comparative advantage in products that are strongly related to their imports, but only EU countries show a strong capability to diversify in new products from related import sectors. Our results also hold when controlling for geographical and institutional proximity.

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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Diversification, European Neighborhood Policy, relatedness, trade
in
Environment and Planning C: Government and Policy
volume
34
issue
4
pages
21 pages
publisher
Pion Ltd
external identifiers
  • scopus:84977074024
  • wos:000378889900003
ISSN
0263-774X
DOI
10.1177/0263774X15614729
language
English
LU publication?
yes
id
b8aeadee-0383-46d7-8df1-a77098933ad6
date added to LUP
2017-01-25 15:49:11
date last changed
2017-09-18 11:34:07
@article{b8aeadee-0383-46d7-8df1-a77098933ad6,
  abstract     = {<p>This paper analyzes the process of industrial diversification in the countries that were part of the European Union (EU-27) and those that were the target of the European Neighbourhood Policy (ENP) in the period 1995–2010 by means of world trade data derived from the BACI database (elaborated UN Comtrade data). Our results show that in both the EU-27 and the ENP countries, the evolution of the productive structure—as proxied by the export mix—is strongly path-dependent: countries tend to keep a comparative advantage in products that are strongly related to their current productive structure, and they also diversify in nearby products. However, this effect is much stronger for ENP countries, signalling their lower resources and capabilities to diversify in products that are not very related to their productive structure. We also show that the future export structures of countries are affected by their imports: both the EU-27 and ENP countries keep a comparative advantage in products that are strongly related to their imports, but only EU countries show a strong capability to diversify in new products from related import sectors. Our results also hold when controlling for geographical and institutional proximity.</p>},
  author       = {Boschma, Ron and Capone, Gianluca},
  issn         = {0263-774X},
  keyword      = {Diversification,European Neighborhood Policy,relatedness,trade},
  language     = {eng},
  month        = {06},
  number       = {4},
  pages        = {617--637},
  publisher    = {Pion Ltd},
  series       = {Environment and Planning C: Government and Policy},
  title        = {Relatedness and diversification in the European Union (EU-27) and European Neighbourhood Policy countries},
  url          = {http://dx.doi.org/10.1177/0263774X15614729},
  volume       = {34},
  year         = {2016},
}