Bahar, DanyHausmann, RicardoHidalgo, César A.2020-11-182013-07Bahar, Dany, Ricardo Hausmann, and César Hidalgo. “Neighbors and the Evolution of the Comparative Advantage of Nations: Evidence of International Knowledge Diffusion?” CID Working Paper Series 2012.235, Harvard University, Cambridge, MA, July 2013.https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37366260The literature on knowledge diffusion shows that it decays strongly with distance. In this paper we document that the probability that a product is added to a country’s export basket is, on average, 65% larger if a neighboring country is a successful exporter of that same product. For existing products, having a neighbor with comparative advantage in them is associated with a growth of exports that is higher by 1.5 percent per annum. While these results could be driven by a common third factor that escapes our controls, they are what would be expected from the localized character of knowledge diffusion.en-USResearch Paper or Report2020-11-18