Economic complexity and growth: Can value-added exports better explain the link?

Philipp Koch

Economics Letters, 2021, vol. 198, issue C

Abstract: In economic literature, economic complexity is typically approximated on the basis of an economy’s gross export structure. However, in times of ever increasingly integrated global value chains, gross exports may convey an inaccurate image of a country’s economic performance since they also incorporate foreign value-added and double-counted exports. Thus, I introduce a new empirical approach approximating economic complexity based on a country’s value-added export structure. This approach leads to substantially different complexity rankings compared to established metrics. Moreover, the explanatory power of GDP per capita growth rates for a sample of 40 lower-middle- to high-income countries is considerably higher, even if controlling for typical growth regression covariates.

Keywords: Complexity; Economic growth; Value-added exports (search for similar items in EconPapers)
JEL-codes: F43 O19 O47 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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Working Paper: Economic Complexity and Growth: Can value-added exports better explain the link? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304420

DOI: 10.1016/j.econlet.2020.109682

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