Export diversification dimensions and performance: Analysis and industrial policy insights from Italian territories over Covid-19 shocks

Export diversification has been long discussed as a strategy to shield from external shocks and stabilize export levels. At the same time, it can proxy for the presence of specific productive and geoeconomic capabilities. This paper considers geographical and sectoral diversification of industrial exports proposing HHI-based indexes that consider different levels of aggregation. Specifically, we explore how these metrics are associated with each other, and how this association is moderated by different levels of export intensity and stability. Overall, they both explain well variations in export intensity over the COVID-19 asymmetric shocks. Further, exposure toward EU markets shows a positive association with stability. These findings and the heterogeneity lens used are then interpreted stressing the relevance of place-based policies in guiding export diversification strategies in the face of global economic challenges.