The risk content of exports
Subtitle: a portfolio view of international trade
By: Julian di Giovanni, Andrei A. Levchenko
Contributors: Levchenko, Andrei A.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16005; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16005.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "It has been suggested that countries which export in especially risky sectors will experience higher output volatility.  This paper develops a measure of the riskiness of a country's pattern of export specialization, and illustrates its features across countries and over time.  The exercise reveals large cross-country differences in the risk content of exports.  This measure is strongly correlated with terms-of-trade and output volatility, but does not exhibit a close relationship to the level of income, overall trade openness, or other country characteristics.  We then propose an explanation for what determines the risk content of exports, based on the theoretical literature exemplified by Turnovsky (1974).  Countries with comparative advantage in the safe sectors or strong enough comparative advantage in the risky sectors will specialize, whereas countries whose comparative advantage in the risky sectors is not too strong will diversify their export structure to insure against export income risk.  We use both non-parametric and parametric techniques to demonstrate that these theoretical predictions are strongly supported by the data"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/27/2010.

Includes bibliographical references.

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