Neighbors and the Evolution of the Comparative Advantage of Nations: Evidence of International Knowledge Diffusion?

Dany Bahar, Ricardo Hausmann and Cesar Hidalgo

No 235, CID Working Papers from Center for International Development at Harvard University

Abstract: The literature on knowledge diffusion shows that it decays strongly with distance. In this paper we document that the probability that a product is added to a country’s export basket is, on average, 65% larger if a neighboring country is a successful exporter of that same product. For existing products, having a neighbor with comparative advantage in them is associated with a growth of exports that is higher by 1.5 percent per annum. While these results could be driven by a common third factor that escapes our controls, they are what would be expected from the localized character of knowledge diffusion.

Keywords: Export Similarity; Innovation; Productivity; Knowledge; Technology; Diffusion; Spillovers (search for similar items in EconPapers)
JEL-codes: F10 F62 F63 O31 O33 (search for similar items in EconPapers)
Date: 2012-04
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Persistent link: https://EconPapers.repec.org/RePEc:cid:wpfacu:235

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