Current Analysis on
Economics & Finance

Research Article  |  Published 6 February 2019

Are Export Product Diversification and Trade Policy Liberalization Complementary or Substitutable in Promoting Inclusive Growth in Developing Countries?

Sèna K. Gnangnon*

Development Division World Trade Organization, Rue de Lausanne 154, CH-1211 Geneva 21, Switzerland


This article investigates empirically the interplay between export product diversification and trade policy liberalization in promoting the inclusiveness of economic growth in developing countries. The empirical analysis relies on a sample of 109 countries over the period 1995-2015 and shows that countries with a high level of export product concentration tend to adopt trade restrictive measures so as to achieve inclusive growth. However, for higher degrees of trade policy liberalization, export product diversification and trade policy liberalization are highly complementary in promoting inclusive growth. One policy implication of this analysis is that to promote inclusive growth, countries that intend to diversify their export product basket should both implement policies in favour of export diversification and further liberalize their trade regimes.

Export product diversification; trade policy liberalization; Inclusive growth; Developing countries.

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