Export instability: An alternative analysis of causes

Numerous studies into the causes of the export instability experienced by developing countries have failed to establish any significant relationships. This paper suggests that the widely‐used technique of cross‐country regression analysis is inappropriate and that the typical explanatory variable set is inadequately specified. Accordingly, analysis is shifted to a time‐series basis at the level of individual countries, and explanatory variables are developed which correspond more closely to the supply and demand determinants of instability. Applying this alternative model to data for a sample of developing countries produces results which suggest that this approach has considerable explanatory power.