Proximity and Horizontal Policies: The Backbone of Export Diversification

The lack of a clear link between general economic fundamentals and export diversification indicators in the literature has fueled believe that industrial policies are an absolute requisite to diversify exports. This paper, however, does find strong statistical connection horizontal by making two novel changes traditional methodologies: using categories lead (for example, manufactures) as dependent variables, gravity-equation regression setting. Proximity other economies explains about third cross-country heterogeneity targeted exports, four fifths together with policies. Australia, Chile, New Zealand emerge new role models for