The Impact of Export Diversification on Unemployment Rates in Developing Countries

Mehrbod, Shirin; Daei-Karimzadeh, Saeed; Rajabi, Mostafa

doi:10.22034/oajre.2025.537443.1129

The Impact of Export Diversification on Unemployment Rates in Developing Countries

Document Type : Original Article

Authors

Shirin Mehrbod ¹

Saeed Daei-Karimzadeh ²

Mostafa Rajabi ³

¹ PhD Student, Department of Economics, Isf.C, Islamic Azad University, Isfahan, Iran.

² Associate Professor, Department of Economics, Isf.C, Islamic Azad University, Isfahan, Iran

³ Associate Professor, Department of Economics, Kho.C, Islamic Azad University, khomainishahr, Iran.

10.22034/oajre.2025.537443.1129

Abstract

Export growth plays an important role in the economy of any country, especially developing countries, due to its impact on trade growth and economic growth. Therefore, the sustainability of export growth rates can be considered an important issue for developing countries. Most studies have proven that export diversification is an effective solution to this issue due to its pivotal role in preventing export concentration deficiency. And since one of the most important macroeconomic goals is to increase the employment rate in the country. The question arises whether export diversification can help increase the employment rate? For this purpose, this study attempts to examine the effect of export diversification on the unemployment rate in developing countries in three groups with different income levels during the years 2008 to 2022 using a generalized system moments model. The results show that in all three groups of countries, export diversification has been able to reduce the unemployment rate. This indicates a positive effect of export diversification on employment.

Keywords

Export diversification

Employment

Gross domestic product

Foreign investment

Higher education level