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Economic complexity and the globalization of services

Author

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  • Mishra, Saurabh
  • Tewari, Ishani
  • Toosi, Siavash

Abstract

Economic complexity has emerged as an important metric to measure nations’ inherent capabilities that are embodied in the structure of economic production. However, traditional measures of complexity only capture manufacturing-based capabilities, ignoring the growing importance of services in global trade. Technological innovations are increasingly splintering and disembodying services so they can be produced, transmitted, and consumed globally. This paper incorporates the role of service globalization to present a more complete picture of the economic complexity of nations. Using a non-linear iterative algorithm, this paper ranks the ‘fitness’ of countries based on the diversity and ‘complexity’ of specialization patterns. Modern technology-enabled service exports are fairly complex specializations but becoming increasingly ubiquitous. Developing countries show greater economic strength accounting for the growing tradability of services. A framework to aid decision-making about product/service export diversification strategies is proposed.

Suggested Citation

  • Mishra, Saurabh & Tewari, Ishani & Toosi, Siavash, 2020. "Economic complexity and the globalization of services," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 267-280.
    • Handle: RePEc:eee:streco:v:53:y:2020:i:c:p:267-280
    DOI: 10.1016/j.strueco.2020.03.002
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    References listed on IDEAS

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    2. Gadsby, April & Tsai, Yichang James & Harvey, John, 2021. "Technology Review and Roadmap for Inventorying Complete Streets for Integration into Pavement Asset Management Systems," Institute of Transportation Studies, Working Paper Series qt99s396gw, Institute of Transportation Studies, UC Davis.
    3. Marc Peter Radke & Manuel Rupprecht, 2021. "Household Wealth: Low-Yielding and Poorly Structured?," JRFM, MDPI, vol. 14(3), pages 1-40, March.
    4. Sundar Ponnusamy, 2022. "Export specialization, trade liberalization and economic growth: a synthetic control analysis," Empirical Economics, Springer, vol. 63(2), pages 637-669, August.
    5. Sèna Kimm Gnangnon, 2022. "Do Aid for Trade Flows Help Reduce the Shadow Economy in Recipient Countries?," Economies, MDPI, vol. 10(12), pages 1-33, December.
    6. Aurelio Patelli & Andrea Zaccaria & Luciano Pietronero, 2021. "Universal Database for Economic Complexity," Papers 2110.00302, arXiv.org.
    7. Blázquez, Leticia & Díaz-Mora, Carmen & González-Díaz, Belén, 2023. "Hubs of embodied business services in a GVC world," International Economics, Elsevier, vol. 174(C), pages 28-43.
    8. Nguyen, Canh Phuc, 2021. "Gender equality and economic complexity," Economic Systems, Elsevier, vol. 45(4).
    9. Khemraj, Tarron & Pasha, Sukrishnalall, 2024. "Structural change and sectoral interconnectedness in two resource-abundant economies," Resources Policy, Elsevier, vol. 88(C).
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    11. Portella-Carbó, Ferran & Pérez-Montiel, Jose & Ozcelebi, Oguzhan, 2023. "Tourism-led economic growth across the business cycle: Evidence from Europe (1995–2021)," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1241-1253.
    12. Lee, Sang M. & Lee, DonHee, 2021. "Opportunities and challenges for contactless healthcare services in the post-COVID-19 Era," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
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    More about this item

    Keywords

    Structural transformation; Economic growth; Export diversification; Emerging technologies; Service exports;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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