  During the last decades two important contributions have reshaped our
understanding of international trade. First, countries trade more with those
with whom they share history, language, and culture, suggesting that trade is
limited by information frictions. Second, countries are more likely to start
exporting products that are similar to their current exports, suggesting that
knowledge diffusion among related industries is a key constrain shaping the
diversification of exports. But does knowledge about how to export to a
destination also diffuses among related products and geographic neighbors? Do
countries need to learn how to trade each product to each destination? Here, we
use bilateral trade data from 2000 to 2015 to show that countries are more
likely to increase their exports of a product to a destination when: (i) they
export related products to it, (ii) they export the same product to the
neighbor of a destination, (iii) they have neighbors who export the same
product to that destination. Then, we explore the magnitude of these effects
for new, nascent, and experienced exporters, (exporters with and without
comparative advantage in a product) and also for groups of products with
different level of technological sophistication. We find that the effects of
product and geographic relatedness are stronger for new exporters, and also,
that the effect of product relatedness is stronger for more technologically
sophisticated products. These findings support the idea that international
trade is shaped by information frictions that are reduced in the presence of
related products and experienced geographic neighbors.
