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Exploring the entropy-complexity nexus. Evidence from Italy

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Listed:
  • Roberto Antonietti

    (University of Padova)

  • Chiara Burlina

    (University of Padova)

Abstract

Combining evolutionary economic geography and the recombinant knowledge approach, we test whether the level of entropy in available capabilities affects the level of a region’s economic complexity. Merging different data sources on 103 Italian NUTS-3 regions and 9 years (between 2008 and 2016), our panel regressions show that a higher level of economic complexity in a region is explained by a higher average level of entropy in the region’s capabilities. We also find this effect stronger in the northern and central regions of Italy, and it is due only to entropy in the available technologies, not in capital or skills. Using structural equation models, we show that variety of skills and relative capital endowment are indirectly linked to the level of economic complexity in Italian regions, since they first stimulate a greater technological diversification.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:epolit:v:40:y:2023:i:1:d:10.1007_s40888-022-00265-9
    DOI: 10.1007/s40888-022-00265-9
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    Keywords

    Capabilities; Economic complexity; Entropy; Regional development; Variety;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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