Before revision: We document a new stylized fact in the global pattern of exports: a relationship between the diversification of a country 's exports and the ubiquity of its products. We argue that this is not implied by current theories of international trade and show that it is not a consequence of the heterogeneity in the level of diversification of countries or of the heterogeneity in the ubiquityof products. We account for this by constructing a model that assumes that each product requires a large number of non-tradable inputs, or capabilities, and that a country can only make the products for which it has all the requisite capabilities.
After revision: We document a new stylized fact in the global pattern of exports: a relationship between the diversification of a country 's exports and the ubiquity of its exports, and the non-normal distributions for product ubiquity, country diversification and product co-export. We model the structure of the network by assuming that products require a large number of non-tradable inputs, or capabilities, and that a country can only make the products for which it has all the requisite capabilities.