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Assessing the role of entropy on economic complexity in Italian regions

In: Unlocking Regional Innovation and Entrepreneurship

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  • Roberto Antonietti
  • Chiara Burlina

Abstract

This chapter analyses whether a higher level of entropy in a region corresponds to higher economic complexity. We focus on Italian NUTS3 regions, which represent an interesting laboratory due to their high heterogeneity in skill endowment, performance and level of development. We measure entropy through a Theil index of industry variety, that we further split into a within-entropy and a between-entropy component. We capture economic complexity through the Hidalgo and Hausmann index, on regional export data at three-digit industry level for the period 2004-10. Our results do not confirm that, in general, regions where entropy is higher are also those where economic complexity is higher too. Instead, we find that this relation holds only in regions characterised by a low level of complexity, and when entropy increases at the intensive margin.

Suggested Citation

  • Roberto Antonietti & Chiara Burlina, 2021. "Assessing the role of entropy on economic complexity in Italian regions," Chapters, in: Iréne Bernhard & Urban GrÃ¥sjö & Charlie Karlsson (ed.), Unlocking Regional Innovation and Entrepreneurship, chapter 7, pages 133-156, Edward Elgar Publishing.
  • Handle: RePEc:elg:eechap:19979_7
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    Cited by:

    1. Roberto Antonietti & Chiara Burlina, 2023. "Exploring the entropy-complexity nexus. Evidence from Italy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 257-283, April.

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