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Some new views on product space and related diversification

Author

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  • Nomaler, Önder

    (UNU-MERIT, Maastricht University)

  • Verspagen, Bart

    (UNU-MERIT, Maastricht University)

Abstract

We aim to contribute to the literature on product space and diversification by proposing a number of extensions of the current literature: (1) we propose that the alternative but related idea of a country space also has empirical and theoretical appeal; (2) we argue that the loss of comparative advantage should be an integral part of (testing the empirical relevance of) the product space idea; (3) we propose several new indicators for measuring relatedness in the product space; and (4) we propose a non-parametric statistical test based on bootstrapping to test the empirical relevance of the product space idea.

Suggested Citation

  • Nomaler, Önder & Verspagen, Bart, 2022. "Some new views on product space and related diversification," MERIT Working Papers 2022-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2022011
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    References listed on IDEAS

    as
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    3. Ricardo Hausmann & Bailey Klinger, 2007. "The Structure of the Product Space and the Evolution of Comparative Advantage," CID Working Papers 146, Center for International Development at Harvard University.
    4. Coniglio, Nicola D. & Vurchio, Davide & Cantore, Nicola & Clara, Michele, 2021. "On the evolution of comparative advantage: Path-dependent versus path-defying changes," Journal of International Economics, Elsevier, vol. 133(C).
    5. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    6. Hausmann, Ricardo & Klinger, Bailey, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," Working Paper Series rwp06-041, Harvard University, John F. Kennedy School of Government.
    7. Boschma, Ron & Capone, Gianluca, 2015. "Institutions and diversification: Related versus unrelated diversification in a varieties of capitalism framework," Research Policy, Elsevier, vol. 44(10), pages 1902-1914.
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    9. G. N. von Tunzelmann, 1995. "Technology and Industrial Progress," Books, Edward Elgar Publishing, number 437.
    10. Ron Boschma & Gianluca Capone, 2016. "Relatedness and diversification in the European Union (EU-27) and European Neighbourhood Policy countries," Environment and Planning C, , vol. 34(4), pages 617-637, June.
    11. Jose Antonio Alonso & Víctor Martín, 2020. "Product relatedness and economic diversification at the regional level in two emerging economies: Mexico and Brazil," Regional Studies, Taylor & Francis Journals, vol. 53(12), pages 1710-1722, July.
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    More about this item

    Keywords

    Diversification; specialization; product space; country space; path dependence of specialization; relatedness;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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