The Role of Technology, Market and Design Relatedness in Export Diversification

Trade and innovation are key drivers of economic activity, promoting growth by increasing productivity and fostering competition. While the relationship between innovation and exports is well established, the specific contributions of different stages of innovation remain underexplored. This paper examines how different stages of innovation – namely technology, market, and design activities – are related to export specialization. We extend the principle of relatedness, as has recently been proposed in the literature, by incorporating multiple activities and apply the methodology to seventy-six countries for the years 2008-2022. By employing a rich set of patent, trademark, design and export data, we show that technology- and market-related capabilities serve as key drivers of new export specializations. Finally, our findings offer policymakers a multidimensional framework potentially applicable to goods and services. JEL Codes: F14, O34, O38