Role of Exports Diversification in Human Development in South Asia: An Empirical Analysis

Abstract

While several studies empirically find the relationship between exports diversification and economic growth, little is known about the relationship between export diversification and human development. This study empirically examines the relationship between export diversification and human development by using Panel data for the period of 1995 to 2020 in South Asia countries likely, Pakistan, Bangladesh, India, Nepal and Sri Lanka. According to the current outward policies in developed countries, the international development institutions stress on the policy of export diversification in South Asia to keep the current pace of economic growth in future. To avoid external shocks and to have the sustained and inclusive growth, the concentration of exports with limited scope of productivity growth and quality of export must be focused in the low income countries. The continuous structural transformation and lower concentration of products and market are key elements to development. This study contributes to the existing literature by exploring the export diversification as one of the determinants of human development in South Asia. The findings from panel Corrected Standard error model in the study confirms positive and significant impact of export diversification on human development in the region. Therefore, the distributional policies may get important role to improve income distribution as well as human development.