Relatedness and diversification in the European Union (EU-27) and European Neighbourhood Policy countries

Research output: Contribution to journalArticle

Abstract

This paper analyzes the process of industrial diversification in the countries that were part of the European Union (EU-27) and those that were the target of the European Neighbourhood Policy (ENP) in the period 1995–2010 by means of world trade data derived from the BACI database (elaborated UN Comtrade data). Our results show that in both the EU-27 and the ENP countries, the evolution of the productive structure—as proxied by the export mix—is strongly path-dependent: countries tend to keep a comparative advantage in products that are strongly related to their current productive structure, and they also diversify in nearby products. However, this effect is much stronger for ENP countries, signalling their lower resources and capabilities to diversify in products that are not very related to their productive structure. We also show that the future export structures of countries are affected by their imports: both the EU-27 and ENP countries keep a comparative advantage in products that are strongly related to their imports, but only EU countries show a strong capability to diversify in new products from related import sectors. Our results also hold when controlling for geographical and institutional proximity.

Details

Authors
  • Ron Boschma
  • Gianluca Capone
Organisations
External organisations
  • Utrecht University
  • Institute for Advanced Studies (IUSS), Pavia
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economic Geography

Keywords

  • Diversification, European Neighborhood Policy, relatedness, trade
Original languageEnglish
Pages (from-to)617-637
Number of pages21
JournalEnvironment and Planning C: Government and Policy
Volume34
Issue number4
Publication statusPublished - 2016 Jun 1
Publication categoryResearch
Peer-reviewedYes