Predicting New Export Specializations in the Western Balkans

Western Balkan policymakers need to identify export activities their economies can realistically develop. Using Harvard Growth Lab data for five economies from 1995 to 2024, this paper tests if product space indicators predict new export specializations across 97,918 observations of products not yet specialized. Relatedness to existing exports consistently predicts new specializations. Existing export sales predict entry, but this association is sensitive to threshold proximity and two-way trade. In sector-specific models, product complexity is positively associated with entry among agriculture and resource-based goods but not manufacturing, and the opportunity indicator is inconsistent. Export screening should give existing capabilities substantial weight.