Commercial Diplomacy in the Context of Export Sophistication: The MIKTA Case

Abstract

Commercial diplomacy has been of interest to researchers in the context of export development due to the many empirical studies indicating that the international economic integrations provide more growth and employment for the governments and internationalization for the enterprises. Unlike the strict and/or regional economic integrations, MIKTA was created as an informal and cross-regional group of ‘middle powers’ bringing together Mexico, Indonesia, the Republic of Korea, Turkey, and Australia in 2013. Being distant apart from each other geographically and having many differences besides their similarities, each of the member states is considered influential in their regions and of high importance for the paradigm shift to a new world order. This paper aims to figure out if MIKTA has been utilized as a powerful advocate for enhancing exports of the member states while also resuming sustainable economic growth. For this reason, it is analyzed to what extent the members’ exports were and have become sophisticated, meaning capital intensive or labour intensive, over the past 20 years and how the members’ economic growth rates were contributed. For the analysis, PRODY and EXPY indices are calculated representing the sophistication levels of, respectively, product groups and the total exports of the states.