Decomposing Export Growth into Extensive and Intensive Margins with the Emphasis on Comparative Advantages

We provide a pioneer review of the literature on extensive and intensive margins of export growth (through new and old goods, respectively), with a focus on empirical results. We also propose the new method for estimating the role of export diversification in export growth, based on comparative advantages and consistent with methods for estimating potential export growth due to specializing on new products. It is shown that the extensive margin has small impact on export growth (on average, about 20% of export growth is realized through the extensive margin). However, for machinery and chemicals, it contributes much stronger (up to 50% of export growth for countries with high export growth rates).