TY - BOOK ID - 136023131 TI - Trade Openness Reduces Growth Volatility When Countries Are Well Diversified AU - Saborowski, Christian AU - Haddad, Mona E. AU - Lim, Jamus Jerome PY - 2010 PB - Washington, D.C., The World Bank, DB - UniCat KW - Achieving Shared Growth KW - Developing countries KW - Economic activity KW - Economic Conditions and Volatility KW - Economic crisis KW - Economic development KW - Economic growth KW - Economic management KW - Emerging Markets KW - External shocks KW - Financial markets KW - Fluctuations KW - Free Trade KW - Growth effect KW - Growth effects KW - Growth process KW - Growth rates KW - Growth volatility KW - Interest rates KW - International Economics and Trade KW - International trade KW - Liberalization KW - Macroeconomic volatility KW - Macroeconomics and Economic Growth KW - Markets and Market Access KW - Poverty Reduction KW - Private Sector Development KW - Structural characteristics KW - Trade openness UR - https://www.unicat.be/uniCat?func=search&query=sysid:136023131 AB - This paper addresses the mechanisms by which trade openness affects growth volatility. Using a diverse set of export diversification indicators, it presents strong evidence pointing to an important role for export diversification in reducing the effect of trade openness on growth volatility. The authors also identify positive thresholds for product diversification at which the effect of openness on volatility changes sign. The effect is shown to be positive only for a minority of countries with highly concentrated export baskets. This result is shown to be robust to both explicit accounting for endogeneity as well as the inclusion of a host of additional controls. ER -