The Impact of Industrialization on Export Diversification in Qatar Online First

Abstract

Export diversification is a central objective of Qatar’s development agenda, as outlined in the Qatar National Vision 2030, in response to the country’s small market and its heavy dependence on hydrocarbons. Industrialization is viewed as a strategic tool to achieve this goal by fostering structural transformation, increasing value-added production, and broadening the export base. Drawing on economic theory and existing literature, the manufacturing sector is seen as central to both trade diversification and long-term economic growth. This study investigates the impact of industrialization on export diversification in Qatar from 1991 to 2022, using an ARDL-ECM approach and the HHI as a measure of export concentration. The results reveal a paradox: while industrialization reduces export concentration in the short run, it increases it in the long run, suggesting a tendency toward sectoral consolidation, primarily around hydrocarbons. These findings underscore the need for more targeted industrial policies to achieve genuine and lasting export diversification.