Export diversification boosts economic growth and stability in developing countries.
Export diversification plays a crucial role in boosting economic growth, especially for developing countries. By spreading out exports across different industries, countries can stabilize their earnings, transfer technology for higher productivity, and stimulate growth in various sectors. Developed countries benefit more from export diversification due to their competitive edge in global markets. Measures like the concentration index and diversification index help evaluate a country's trade diversification level. Overall, studies show that diversifying exports leads to economic growth.