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The study investigates whether export diversification or export specialization is more useful toward promoting economic growth in BRICS countries. We estimate a dynamic growth model augmented with trade activity to capture the diversification-concentration trade-off with economic growth for BRICS economies over the period of 1995 to 2017 using FMOLS, DOLS, and PMG estimators. Altogether, we find a positive (negative) relationship between export concentration (diversification) and economic growth in BRICS countries. Further analysis points to a semi-inverted U-shaped diversification schedule, of which the BRICS countries have crossed their “inflexion point” of development and need to re-specialize their export baskets.
Siswana et al. (Fri,) studied this question.
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