ABSTRACT
It is well known that for a number of developing countries, export growth appears to 'cause' economic growth. The Latin American experience demonstrates that knowledge gained by exporting goods produced in sector one can be utilized by other exporters. This chapter begins by presenting the theoretical motivation which allows us the capture the dynamics in the export sector and its impact on growth. It replicates the widespread rejection of the conventional export-led growth hypothesis for Colombia. To develop an empirical model that integrates this concept of structural change in the export sector as a key source of growth the chapter generates several measures of export diversification and structural change in exports. The results indicate that increased export diversification leads to more rapid growth in real exports; and, that more rapid structural change in exports is associated with accelerated growth in Colombian gross domestic product (GDP).
