Impact of Income Diversity on Export Trade in RCEP Countries

Abstract

Industrial structure has become an important factor affecting a country’s export trade. With the signing of RCEP, it is necessary to analysis the impact of industrial structure on export trade for those RCEP countries. Through two-way fixed effects approach, this study constructs an income diversity index to measure the diversity of industrial structure and uses a panel data of 14 RCEP countries (excluding Brunei) from 2006 to 2019 to analyze the impact of income diversity on export trade. This study found that: (1) The income diversity of RCEP members has a significant positive effect on their export trade performance; (2) A sub-sample analysis shows that the income diversity of lower-middle and high-income economies has a significant positive effect on their export trade, while the upper-middle-income economies did not show a significant impact. In order to achieve the ambitious goal of high-quality economic development, members at various stages of development should their own formulate development strategies based on their own industrial economic characteristics and expand international trade competitiveness.