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From variety to economic complexity: empirical evidence from Italian regions

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  • Roberto Antonietti
  • Chiara Burlina

Abstract

Taking an evolutionary economic geography approach, we test whether the level of industry variety in a region affects its economic complexity. With reference to Italy, we measure variety using a Theil index of information entropy, and complexity with the Hidalgo and Hausmann index. Our results show that regions where variety grows faster also have a higher rate of growth in economic complexity. This relationship only holds in regions with low initial levels of variety and/or complexity, however, which are mainly located in the South of Italy. We suggest that product diversification, by increasing regional specialization in high-tech industries, can explain regional development and Italian North-South disparities.

Suggested Citation

  • Roberto Antonietti & Chiara Burlina, 2019. "From variety to economic complexity: empirical evidence from Italian regions," Papers in Evolutionary Economic Geography (PEEG) 1930, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2019.
  • Handle: RePEc:egu:wpaper:1930
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    File URL: http://econ.geo.uu.nl/peeg/peeg1930.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    economic complexity; entropy; industry variety; unit root;
    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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