The Global Market
The acceleration of global trade in the latter half of the 20th century has seen a departure from classical trade theories that were built around perfect competition, comparative advantage, and constant returns to scale. Instead, countries appear to diversify in terms of production and exports as they grow. However, in most studies, the "concentration phenomenon" is referenced, which basically consists of commodity and market concentration and contributes to instability in export revenue. To maintain stability in export receipts, a broadening of the export base through a more diversified national trade portfolio has commonly been suggested. It has also been argued that, for poor countries to grow rich, it is essential to modify the composition of their exports. The debates about the Schlesinger hypothesis and the need for industrialization gave priority to diversifying economies away from primary commodities because of unfavorable and declining terms of trade, low value added, and slow productivity growth.