A Strategy for Post-crisis Growth of Madagascar Export Diversification and Economic Growth

Export diversification can lead to higher growth. Developing countries should diversify their exports since this can; for example, help them to overcome export instability or the negative impact of terms of trade in primary products. The process of economic development is typically a process of structural transformation where countries move from producing “poor-country goods” to “rich-country goods”. Export diversification does play an important role in this process. We also provide robust empirical evidence of a positive effect of export diversification on real GDP per capita.