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Economic complexity, structural transformation and economic growth in a regional context: Evidence for Brazil

Author

Listed:
  • Felipe Orsolin Teixeira

    (Federal University of Rio Grande do Sul, Brazil)

  • Fabricio Jose Missio

    (Federal University of Minas Gerais, Brazil)

  • Ricardo Dathein

    (Federal University of Rio Grande do Sul, Brazil)

Abstract

The purpose of this paper is to verify the effect of economic complexity on the growth and productive transformation of federative units (UFs) in Brazil between 2003 and 2014. We also analyze the factors that determine the economic complexity of these subnational entities. To do this we used different indices of economic complexity (linear and non-linear), as well as system generalized method of moments (GMM-SYS) estimators in dynamic panels to avoid endogeneity problems. The results showed that: i) through the descriptive analysis (both by the linear and the non-linear versions) a positive relationship between the UFs' economic complexity and economic growth was observed; ii) the econometric analysis showed that measures of economic complexity are positively related to economic growth – however, some of the coefficients did not show statistical significance and the coefficients that represent the non-linear approach showed weak correlation; iii) there is a positive relationship between the real exchange rate at the state level (R$/US$) and the UFs' productive transformation, such as between the UFs' productive transformation and the economic complexity.

Suggested Citation

  • Felipe Orsolin Teixeira & Fabricio Jose Missio & Ricardo Dathein, 2022. "Economic complexity, structural transformation and economic growth in a regional context: Evidence for Brazil," PSL Quarterly Review, Economia civile, vol. 75(300), pages 63-79.
    • Handle: RePEc:psl:pslqrr:2022:15
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    More about this item

    Keywords

    Economic complexity; federative units; productive transformation;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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