Policy

Research

Working

Paper10709St

ages

of

Diversi?

cat

ion

ReduxHodaAssemRobertaGattiDanielLedermanMiddle

East

and

Nort

h

Africa

RegionO?ce

of

t

he

Chief

EconomistFeb

ru

ary

2024A

verified

reproducibility

package

for

this

paper

isavailable

at

,clickhere

for

direct

access.Policy

Research

Working

Paper

10709Abstracte

existing

literatu

re

on

develop

ment

and

economicdiversi?cation

?nds

an

inverted-U

function

between

thesetwov

ariab

les,

w

hereby

economies

diversify

as

they

growup

to

a

p

oint,

after

which

they

st

art

sp

ecializing.

ispapercontributes

to

this

literatu

re

by

investigating

thestages

of

diversi?cation

over

the

cou

rse

of

develop

mentduring

the

p

ast

57

y

ears.

e

paper

emphasizes

the

t

ra-j

ect

ories

of

resou

rce-

rich

and

resource-p

oor

countries,

anissue

that

has

not

been

cov

ered

by

the

extant

lit

erat

u

re.In

addition,

the

p

ap

er

studies

the

stages

of

diversi?cationacross

three

dimensions,

nam

ely

emp

loyment,

value-added,and

exp

orts.

Additionally,

it

examines

the

relat

ionship

forservices.

Non-p

arametric

estimations

suggest

aU-shapedcu

rve

between

m

easu

res

of

economic

concentration

andp

er

cap

ita

income

lev

els,

which

is

in

line

with

existingevidence.

However,

these

p

atterns

are

m

ainly

driven

bybetween-country

rat

her

than

within-country

variation,

a?nding

that

had

been

ignored

in

the

existing

lit

erat

u

re.Diversi?cation

p

atterns

also

di?er

across

resource-rich

andresource-p

oor

countries:

Emp

loyment

and

value

added

inresource-rich

countries

are

on

average

more

concentrated

atlow

lev

els

of

develop

ment

while

in

resource

p

oorcountries,they

are

m

ore

concentrated

at

high

lev

els

of

develop

ment.In

cont

rast

,

at

all

levels

of

develop

ment,

exp

orts

are

m

oreconcentrated

in

resou

rce-

rich

countries.is

paper

is

a

p

roduct

of

the

O?ce

of

the

Chief

Economist,

Middle

East

and

Nort

h

Africa

Region.

It

is

p

art

of

a

largere?

ort

by

the

World

Bankto

provide

open

access

to

its

research

and

make

a

contribution

to

development

p

olicy

discussionsarou

nd

thew

orld

.

Poli

cy

Research

Working

Pap

ers

are

alsop

osted

on

the

Web

at

http

:///p

rwp

.

eau

t

hors

may

becontacted

at

hassem10@.

A

veri?ed

rep

roducibility

p

ackage

for

this

paper

is

availab

le

athttp

://rep

,

cli

ck

here

for

direct

access.TRANSPARENTANALYSISGe

Policy

Research

Working

Paper

Series

disseminates

the

?ndings

of

work

in

progress

to

encourage

the

exchange

of

ideas

about

developmentissues.

An

objective

of

the

series

is

to

get

the

?ndings

out

quickly,

even

if

the

presentations

are

less

than

fully

polished.

e

papers

carry

thenames

of

the

authors

and

should

be

cited

accordingly.

e

?ndings,

interpretations,

and

conclusions

expressed

in

this

paper

are

entirely

thoseoftheauthors.eydonotnecessarilyrepresenttheviewsoftheInternationalBankforReconstructionandDevelo