The paper
This paper examines whether lower trading and business entry costs help developing countries export a wider range of products. Evidence from 118 countries points to trade facilitation as a practical route to diversification.
Research findings
- Lower international transport and domestic export costs are associated with a broader range of products exported to the European Union.
- Customs costs play an important role; lower business entry costs also support diversification, with smaller estimated effects.
Policy takeaways
- Make customs procedures, export documentation, and transport costs part of diversification policy.
- Reduce the costs of entry and exporting so firms can test new products and markets, rather than relying solely on targeted sector support.