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Drivers Of Economic Complexity: New Evidence From Developing Countries

Author

Listed:
  • Francis Anyaara Santaa

    (Kwame Nkrumah University of Science and Technology, Ghana)

  • Daniel Sakyi

    (Kwame Nkrumah University of Science and Technology, Ghana)

  • Paul Owusu Takyi

    (Kwame Nkrumah University of Science and Technology, Ghana)

Abstract

This paper examines the drivers of economic complexity in developing countries, using a balanced panel data on 102 countries from 2000-2018. The two-step system Generalized Method of Moments estimation technique was employed. The results show that while economic growth, institutional quality, population density and education are important in promoting the level of economic complexity in developing countries, terms of trade has a negative effect on economic complexity. The heterogeneous analysis reveals that, in the context of Africa, natural resource rents and education are positive drivers of economic complexity but exchange rate affects economic complexity negatively. Conversely, in non-African settings, economic growth and population density positively drive economic complexity but institutional quality, terms of trade and financial development negatively drive economic complexity. These distinctions point to the fact that a one-size-fits-all approach may not be appropriate, and policies should be designed to account for the unique economic, institutional, and developmental characteristics of African and non-African developing countries.

Suggested Citation

  • Francis Anyaara Santaa & Daniel Sakyi & Paul Owusu Takyi, 2026. "Drivers Of Economic Complexity: New Evidence From Developing Countries," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 51(3), pages 113-134, September.
    • Handle: RePEc:ris:jecdev:023662
    DOI: 10.35866/caujed.2026.51.3.005
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    Keywords

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    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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