Date of Award

Fall 12-2016

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Political Science, International Development, and International Affairs

Committee Chair

Dr. Shahdad Naghshpour

Committee Chair Department

Political Science, International Development, and International Affairs

Committee Member 2

Dr. Robert Pauly

Committee Member 2 Department

Political Science, International Development, and International Affairs

Committee Member 3

Dr. Joseph St. Marie

Committee Member 3 Department

Political Science, International Development, and International Affairs

Committee Member 4

Dr. William Charles Sawyer

Abstract

This work investigates the connection, independent of other factors, between a country’s system of law and property rights and patterns of trade. Stronger property rights institutions are hypothesized to lead to greater diversity in exports and a greater proportion of higher value-added exports. Production and export possibilities depend on capital, labor, and technology. Technology is the way in which capital and labor resources can be organized for productive purposes. Property rights condition expressions of technology and thus production possibilities and export potential. Consequently, if property rights vary between countries, then technological expression, production possibilities, and export potential vary as well. Property rights institutions govern the expression of individual and firm-level entrepreneurship, and to what extent entrepreneurs can effectively apply indigenous production factor endowments to develop commercial enterprises in diverse, and higher value-added industries. Commercial enterprises leverage available physical and human resources in proportion to entrepreneurs’ level of effectiveness to yield a country’s set of production capabilities. The number and types of export industries are constrained by a country’s ability to expand its production capabilities. Property rights regimes manifest the incentive structure that determines entrepreneur effectiveness; entrepreneur effectiveness leads to increases in number and diversity of production capabilities. Diversity of industry production capabilities allows for diversity in exports, and complex industry capabilities allow production and export from higher value-added industries. A time-series cross-section (TSCS) analysis of empirical data for 109 countries from 2005 to 2013 shows evidence of a direct relationship between property rights and diversity and complexity of a country’s exports. These findings identify a significant institutional determinant of trade that can be used along with measures of factor endowment, demand structure, and proximity measures to characterize and explain export patterns. Results of the study invite further research to explore the relation of diversification in exports to the advantages of production and export portfolio diversification and to causes of a nation’s economic growth, development, stability, and resilience in general.

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