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"Feenstra and Kee study the link between export product variety and country productivity based on data from 34 industrial and developing countries, from 1982 to 1977. They measure export product variety by the share of U. S. imports on the set of goods exported by each sampled country relative to the world. It is a theoretically sound index which is consistent with within-country GDP maximization, as well as cross-country comparison. The authors construct country productivity based on relative endowments and product variety. Increases in output product variety improve country productivity as the new mix of output may better use resources of the economy and improve locative efficiency. such effects depend on the elasticity of substitution in production between the different varieties. The more different the varieties are in terms of production, the more efficient it is to use the

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