Impact of Productive Abilities on the Exports Complexities in Developing Countries

One of the main drivers of exports complexity and changes in production structure in developing countries is productive abilities (accumulated knowledge). This paper aims to estimate the effectiveness of factors driving productive abilities on exports complexities of developing countries using a panel data for the period 1997-2013 and Generalized Least Squares method. The result shows that factors generating productive abilities on export complexities in developing countries are heterogeneous across income levels and that foreign direct investment is the only factor which has a significant impact on country’s export complexities. Developing countries need to increase their exports complexity through attracting foreign direct investment in order to achieve high economic growth.