The Product Space Conditions the Development of Nations
AbstractEconomies grow by upgrading the type of products they produce and export. The technology, capital, institutions and skills needed to make such new products are more easily adapted from some products than others. We study the network of relatedness between products, or product space, finding that most upscale products are located in a densely connected core while lower income products occupy a less connected periphery. We show that countries tend to move to goods close to those they are currently specialized in, allowing nations located in more connected parts of the product space to upgrade their exports basket more quickly. Most countries can reach the core only if they jump over empirically infrequent distances in the product space. This may help explain why poor countries have trouble developing more competitive exports, failing to converge to the income levels of rich countries.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number 0708.2090.
Date of creation: Aug 2007
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Publication status: Published in Science 317, 482 (2007)
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Web page: http://arxiv.org/
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hausmann, Ricardo & Hidalgo, CÃ©sar A., 2010.
"Country Diversification, Product Ubiquity, and Economic Divergence,"
4554740, Harvard Kennedy School of Government.
- Hausmann, Ricardo & Hidalgo, Cesar A., 2010. "Country Diversification, Product Ubiquity, and Economic Divergence," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp10-045, Harvard University, John F. Kennedy School of Government.
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