  Countries tend to diversify their exports by entering products that are
related to their current exports. Yet this average behavior is not
representative of every diversification path. In this paper, we introduce a
method to identify periods when countries enter unrelated products. We analyze
the economic diversification paths of 93 countries between 1965 and 2014 and
find that countries enter unrelated products in only about 7.2% of all
observations. We find that countries enter more unrelated products when they
are at an intermediate level of economic development, and when they have higher
levels of human capital. Finally, we ask whether countries entering more
unrelated products grow faster than those entering only related products. The
data shows that countries that enter more unrelated activities experience a
small but significant increase in future economic growth, compared to countries
with a similar level of income, human capital, capital stock per worker, and
economic complexity.
