Achieving stable economic growth is a fundamental objective for many countries. However, developing economies face considerable challenges because of their dependence on exports of a single product. Export diversification is widely regarded as an effective policy for reducing economic vulnerability and a key component of development during the structural transformation from primary commodity production to industrial goods. Given the importance of export diversification and the prevalence of corruption, examining their relationship has become increasingly important. This study investigates the nonlinear effect of corruption on export diversification in a sample of developing countries from 2005 to 2023 using a Panel Smooth Transition Regression (PSTR) model, with the Control of Corruption (COC) index as the transition variable. The estimation results reveal a strong nonlinear relationship and support a two-regime specification with a threshold value of 0.3913 and a slope parameter of 1.93. Corruption has a positive and statistically significant association with export diversification in the first regime, but the relationship becomes negative and remains significant in the second regime, confirming an inverted U-shaped pattern. Natural resource abundance, financial development, and trade openness positively and significantly affect export diversification in both regimes. Moreover, real per capita income and information and communication technology have positive and significant effects after the threshold is exceeded. These findings offer important policy implications for promoting sustainable export diversification in developing economies.
Ansari, R. , Daei Karimzadeh, S. and Khosravi, A. (2026). The Effect of Corruption on Export Diversification in Selected Developing Countries: an Application of the Panel Smooth Transition Regression Model. Iranian Journal of Economic Studies, 15(2), 431-456. doi: 10.22099/ijes.2026.56211.2122
MLA
Ansari, R. , , Daei Karimzadeh, S. , and Khosravi, A. . "The Effect of Corruption on Export Diversification in Selected Developing Countries: an Application of the Panel Smooth Transition Regression Model", Iranian Journal of Economic Studies, 15, 2, 2026, 431-456. doi: 10.22099/ijes.2026.56211.2122
HARVARD
Ansari, R., Daei Karimzadeh, S., Khosravi, A. (2026). 'The Effect of Corruption on Export Diversification in Selected Developing Countries: an Application of the Panel Smooth Transition Regression Model', Iranian Journal of Economic Studies, 15(2), pp. 431-456. doi: 10.22099/ijes.2026.56211.2122
CHICAGO
R. Ansari , S. Daei Karimzadeh and A. Khosravi, "The Effect of Corruption on Export Diversification in Selected Developing Countries: an Application of the Panel Smooth Transition Regression Model," Iranian Journal of Economic Studies, 15 2 (2026): 431-456, doi: 10.22099/ijes.2026.56211.2122
VANCOUVER
Ansari, R., Daei Karimzadeh, S., Khosravi, A. The Effect of Corruption on Export Diversification in Selected Developing Countries: an Application of the Panel Smooth Transition Regression Model. Iranian Journal of Economic Studies, 2026; 15(2): 431-456. doi: 10.22099/ijes.2026.56211.2122
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