Overall Specialization and Income: Countries Diversity

<font face="CMBX12"> </font><p>  This paper gives evidence to a stylized fact often disregarded in international trade empir-ics: countries' diversification. In the last fifteen years, the growth of world trade coexistedwith the tendency of countries to reduce the specialization of their export compositionalong the development path. On average, countries do not specialize, they diversify. Oursemiparametric empirical analysis shows how this result is robust to the use of differentstatistical indexes used to measure trade specialization to the level of sectoral aggrega-tion and to the level of smoothing in the nonparametric term associated to income percapita. Using a General Additive Model (GAM) with country-specific fixed-effect, we showthat, controlling for countries heterogeneity, sectoral export diversification increases withincome.