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Keywords:

  • diversification;
  • relatedness;
  • sophistication;
  • trade;
  • innovation;
  • Brazil
  • F14;
  • L25

Summary

This paper contributes to understanding the process of export diversification by analysing firm level determinants in Brazil during the period 2000–2009. The first objective of the paper is to establish the set of firm characteristics and processes that are more conductive to new exports; the second, to identify different pathways to diversification regarding relatedness and sophistication and, which firm level behaviours can be associated to the different paths. We answer these questions using a unique dataset that links data on exports, innovation and firms characteristics at the firm level. The paper contributes to the literature on export diversification and on preparation for exporting by identifying firm level behaviours that contribute to the process of diversification. In particular, the findings suggest that firms prepare for diversification by first gaining power in the domestic market and more importantly that they do so by adopting specific innovation and learning efforts.