2. Scope of the Study: Exports of Differentiated Products to Developed Countries The objective of this study is to understand and characterize the emergence of export activity in economic sectors previously oriented toward the domestic market. We studied firms and sectors in a semi-industrialized country (Argentina), focusing mainly on exports to developed economies as the destination market. The economic sectors that were studied have some common features: they produce differentiated goods and are mostly populated by small- and medium-sized enterprises. This section explains the reasons for constraining the scope of the study to exports to developed economies and describes the criteria that were used to select the case-study sectors. 2.1 Scope of the Study Argentina is a country with a considerably diversified industrial base, largely developed during the period of import-substituting industrialization. In most industrial sectors, there are wellestablished firms that have been operating (even occasionally exporting) for decades. Despite the long presence of local firms supplying the domestic market, export activity in most sectors has traditionally been scarce. The lack of export activity is particularly salient in the case of differentiated goods; a substantial fraction of exports of industrial products consists of commodities such as paper pulp, aluminum, and petro-chemicals. During the past two decades, many developing countries initiated processes of impressive export growth largely directed toward developed countries. The strong export performance of those countries is usually attributed to a combination of policy changes (such as opening their economies to foreign trade and investment) and worldwide technological advances (such as drastic reductions in transportation, information, and communication costs). As occurred with many other Latin American countries, Argentina also liberalized its foreign trade and investment regimes and benefited from similar technological advances. However, export growth in Argentina has been considerably less spectacular than in other countries, mostly with regard to differentiated-product exports to developed countries. While Argentina’s total exports grew by a factor of 3.3 from 1991 to 2005, exports of differentiated products to OECD countries grew by a factor of 2.6. These exports accounted for only 4.5 percent of total exports in 2005. 2
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The classification of goods as differentiated or non-differentiated follows Rauch (1999). OECD countries are members of this organization in 1991.
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