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Product complexity and economic development

  • Felipe, Jesus
  • Kumar, Utsav
  • Abdon, Arnelyn
  • Bacate, Marife

Development is a process of transforming a country's economic structure towards the production and export of more complex products. We use Hidalgo and Hausmann's (2009) method of reflections to compute measures of product and country complexity, and rank 5107 products and 124 countries. We find that: (i) the most complex products are in machinery, chemicals, and metals, while the least complex products are raw materials and commodities, wood, textiles, and agricultural products; (ii) the most complex economies in the world are Japan, Germany, and Sweden, and the least complex, Cambodia, Papua New Guinea, and Nigeria; (iii) the major exporters of the more complex products are the high-income countries, while the major exporters of the less complex products are the low-income countries; and (iv) export shares of the more complex products increase with income, while export shares of the less complex products decrease with income.

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Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 23 (2012)
Issue (Month): 1 ()
Pages: 36-68

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Handle: RePEc:eee:streco:v:23:y:2012:i:1:p:36-68
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