Transcending the geographical stickiness of complex economic activities via strategic unrelated diversification

Wenwan Jin, Shengjun Zhu, Deyu Li and Canfei He

Structural Change and Economic Dynamics, 2025, vol. 73, issue C, 65-76

Abstract: Developing economies often face challenges in catching up and leapfrogging due to the drawbacks of industrial restructuring. This study identifies the geographical stickiness of high-complexity industries and proposes an optimal industrial diversification strategy using a thorough examination of industry entry and maintenance at the global level. The findings indicate that the mechanisms driving the geographical stickiness of complex industries are linked to their reliance on a larger number of related complex industries, as explained by the “capabilities approach”. Moreover, we encourage developing countries to strategically diversify into a small group of related and inter-dependent high-complexity industries simultaneously, a process called “strategic unrelated diversification”, thereby increasing the probability of industrial transformation. These findings have significant implications for explaining why certain countries struggle with industrial restructuring and how to facilitate industrial upgrading effectively.

Keywords: Geographical stickiness; Complex products; Product relatedness; Strategic unrelated diversification (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0954349X24001942
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:73:y:2025:i:c:p:65-76

DOI: 10.1016/j.strueco.2024.12.018

Access Statistics for this article

Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().