This paper measures the trends, specifically for exporters, in bilateral trade costs and more specifically for costs associated with policy barriers. The study further examines the effects of different trade cost components on bilateral export flows via the dynamic panel gravity model. Empirical evidence shows that trade costs generally have a declining trend globally, however, in the case of emerging countries, this rate of decline is very low. The costs associated with non-tariff barriers in emerging countries have a greater role in the continuation of higher trade costs, in comparison to tariff barriers' costs. Likewise, the two-steps system GMM model's results suggest that the infrastructure quality, transportation costs, volatility of exchange rate, and uncertainty in time (days) delay are major hurdles in the sustainable growth of exports and indeed have rendered the exports uncompetitive in the world market, those are also sturdily supported by the prediction of the theory.

This paper examines the role played by country-specific factors in the determination of export product diversification process. To meet this objective, the paper begins by constructing a time series data for export diversification using the Herfindahl index. Then, it applies the fully modified OLS co-integration model to a panel of selected ASEAN and SAARC countries to find out the main determinants of export product diversification. Export diversification pattern shows that since the mid-1980s the ASEAN countries have continuously witnessed export diversification and the SAARC countries embarked on export diversification journey since the early 1990s. Analysis of the determinants suggests that foreign direct investment, domestic investment, competitiveness, real depreciation of domestic currency, financial sector development and institutional strength are significantly and positively related to export product diversification in both regions. These findings have important policy implications for the two regions. They call upon the policymakers for further diversification of exports, especially in the areas of their specialization that are vital for their smooth and sustained foreign exchange earnings as well as economic development. The study also recommends improving international competitive strength via improving business environment to achieve the goal of export product diversification.

The authors have withdrawn this preprint due to author disagreement.