Export sophistication: A dynamic panel data approach
Central Bank of Armenia
Working Paper No. 17/2
Export sophistication: A dynamic panel data approach
Evžen Kočenda and Karen Poghosyan
November 2017
Abstract
In this paper we analyse export sophistication based on a large panel dataset (2001–2015; 101 countries) and using various estimation algorithms. Using Monte Carlo simulations we evaluate the bias properties of estimators and show that GMM-type estimators outperform instrumentalvariable and fixed-effects estimators.
Based on our analysis we document that GDP per capita and the size of the economy exhibit significant and positive effects on export sophistication; weak institutional quality exhibits negative effect. We also show that export sophistication is pathdependent and stable even during a major economic crisis, which is especially important for emerging and developing economies.