exportdependent

Export-dependent describes an economy, sector, or firm that derives the majority of its revenue, employment, or growth from selling goods and services to foreign markets. This dependence can arise from resource endowments, industrial specialization, geographic advantages, or policy choices that prioritize external demand.

The concept is commonly measured by indicators such as the export share of GDP, the concentration of exports in a narrow range of products or destinations, and the sensitivity of export earnings to global demand and prices. A high level of export dependence often reflects openness to trade and integration into global value chains, but it also signals exposure to external shocks and currency movements.

Implications of export dependence are mixed. When global demand is strong, open economies can experience robust growth, investment inflows, and technology transfer. Conversely, exposure to commodity price swings, demand downturns, or exchange-rate volatility can translate into business cycles, revenue instability, and, in some cases, investment volatility. In commodity-rich contexts, rapid export expansion can contribute to Dutch disease, where rising resource sectors affect the competitiveness of other tradable sectors.

Policy responses focus on diversification and resilience. These include broadening the export base to new products or markets, strengthening domestic demand, upgrading value chains and technology capabilities, and creating stabilization instruments to smooth revenue fluctuations. Development of human capital, innovation, and infrastructure support long-term diversification beyond a narrow export focus.

See also: export-led growth, Dutch disease, commodity dependence, economic diversification, trade openness.