A fundamental objective of many countries is to achieve stable economic growth. However, developing economies face numerous challenges due to their reliance on the export of a single product. Export diversification is widely considered an effective policy for reducing economic vulnerability and a key element of economic development during the structural transformation from primary commodity production toward industrial goods. Given the importance of export diversification and the widespread incidence of corruption, investigating the relationship between these two variables has become increasingly important. This study examines the nonlinear effect of corruption on export diversification in a sample of developing countries over the 2005–2023 period using the Panel Smooth Transition Regression (PSTR) model. The Control of Corruption (COC) index is employed as the transition variable. The estimation results provide evidence of a strong nonlinear relationship among the variables and support a two-regime specification with a threshold value of 0.3913 and a slope parameter of 1.93. The findings show that corruption is positively and statistically significantly associated with export diversification in the first regime, whereas this relationship turns negative and remains statistically significant in the second regime. These results therefore confirm the inverted U-shaped relationship between corruption and export diversification for the countries examined. Natural resource abundance, financial development, and trade openness exert positive and statistically significant effects on export diversification in both regimes. In addition, real per capita income and information and communication technology have positive and statistically significant effects once the threshold level is exceeded.
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, (), -. 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, , , 2026, -. 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, (), pp. -. 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, (2026): -, 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; (): -. doi: 10.22099/ijes.2026.56211.2122
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