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The Micro-D Classification: A New Approach to Identifying Differentiated Exports
In: Economia: journal of the Latin American and Caribbean Economic Association, Band 18, Heft 2, S. 1-27
ISSN: 1533-6239
It is common to assess the evolution of a country's export structure as a
manifestation of the extent of progress or stagnation in its development process.
Performing this exercise requires determining which features of exported products denote
higher stages in that process. We argue that exports of differentiated products,
especially when sold to developed countries, signal the acquisition of valuable
knowledge that reflects development progress. We propose a new classification, denoted
Micro-D, that works at the finest aggregation level in customs nomenclatures to provide
a more precise identification of differentiated products. Specifically, the
classification uses package size as a proxy for product differentiation to identify
differentiated food and beverage exports. Thus, it is especially—though not
exclusively—suited to capturing export upgrading in land-abundant developing countries.
We apply the Micro-D classification to Argentina in 1998–2011 to deliver a new picture
of the country's sources of export upgrading in this period.
JEL Codes: F10,
F14, O14