Autocatalytic Networks and the Green Economy

Arnaud Persenda and Alexandre Ruiz
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Arnaud Persenda: Université Côte d'Azur, France
Alexandre Ruiz: Université Côte d'Azur, France

No 2023-16, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: Green goods are products necessary to reach sustainable development targets. Since they offer many benefits, we discuss the question of why not all countries produce them. Using the economic complexity framework, we study how likely it is that a country will get a comparative advantage by producing green goods. We also study the externalities in terms of diversification prospects that arise from gaining a comparative advantage by producing and exporting green goods. For this purpose, we define a directed network in which nodes are products and links are the probability that a product catalyzes another one several years later. This network uses bilateral trade flows at the 6-digit level to assess the autocatalytic structure of product adoption, by identifying clusters of self-reinforcing products. We show that green goods are less prone to self-reinforcement compared to their non-green counterparts and offer fewer avenues for economic diversification. We also find that the impact of diversification varies across countries, suggesting that a one-size-fits-all approach to fostering the production of green goods may not be effective.

Keywords: Economic complexity; Economic growth; Structural change; Networks; Autocatalytic set (search for similar items in EconPapers)
JEL-codes: D85 F43 O25 O44 O50 Q50 Q56 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2023-11
New Economics Papers: this item is included in nep-env, nep-hme, nep-ino and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2023-16

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