Does export diversification converge? Evidence from cross-country analysis

This study examines the export diversification convergence across a broad set of countries. In particular, it focuses on whether the 127 Non-OECD countries are converging with 34 OECD countries in terms of export diversification. The study uses the annual data of 161 countries from 1995 to 2016. Techniques such as panel unit root tests, panel data models, and panel club convergence technique are applied for analysis. The results derived from these techniques support the evidence of export diversification convergence. This implies that the lower export diversified (Non-OECD) countries are 'catching up' with the higher export diversified (OECD) countries. Further, the findings suggest that Non-OECD countries should diversify their export with a speed of more than 3% to catch the OECD countries in order to achieve high and stable economic growth