Trade glossary · measurement

Export concentration

How dependent a country is on a small number of products or markets for its export earnings. High concentration = vulnerable to shocks. Often measured with a Herfindahl-Hirschman Index.

A country whose exports are dominated by one product (oil, copper, coffee) is highly concentrated and exposed to commodity-price swings. Diversified exporters (Germany, China, USA) absorb shocks better. The Herfindahl-Hirschman Index (HHI) for trade is the sum of squared shares of each product or partner in total exports — values closer to 1 indicate higher concentration.

Examples

  • Saudi Arabia: ~75% of exports concentrated in mineral fuels (HS 27).
  • Botswana: ~85% in diamonds (HS 7102).
  • Germany: well-diversified, top product is ~5% of total.

Related terms

Revealed comparative advantage (RCA)
An index of how specialized a country is in exporting a particular product, relative to that product's share of world trade. RCA > 1 means above-average specialization.
Product space
A network of products where proximity reflects how often countries export them together. Used to predict which new products a country could plausibly start exporting.