Is Export Diversification or Export Specialization Responsible for Economic Growth in BRICS Countries?

ABSTRACT

The study investigates whether export diversification or export specialization is more useful toward promoting economic growth in BRICS countries. We estimate a dynamic growth model augmented with trade activity to capture the diversification-concentration trade-off with economic growth for BRICS economies over the period of 1995 to 2017 using FMOLS, DOLS, and PMG estimators. Altogether, we find a positive (negative) relationship between export concentration (diversification) and economic growth in BRICS countries. Further analysis points to a semi-inverted U-shaped diversification schedule, of which the BRICS countries have crossed their “inflexion point” of development and need to re-specialize their export baskets.

KEYWORDS:

• Export specialization
• export diversification
• economic growth
• BRICS countries

Disclosure statement

No potential conflict of interest was reported by the authors.