Export Product Diversification, Services Production and Exports in Least Developed Countries

This paper investigates the relationship between the diversification of export products in least developed countries (LDCs) and their services production and exports. It uses a dataset comprising 30 LDCs over the period 1995-2010. The empirical results suggest strong evidence that export product diversification in LDCs is a catalyzer for their commercial services exports, alongside factors such as per capita income, foreign direct investment (FDI), and regulatory quality policies. However, export products diversification does not appear to exert a significant effect on LDC services production. These findings have important implications for both the international trade community and LDC governments.