Economic complexity and financial development: A multilayered analysis of the European Union

Linus Zechlin

No 258/2025, IPE Working Papers from Berlin School of Economics and Law, Institute for International Political Economy (IPE)

Abstract: The economic complexity framework by César Hidalgo and Ricardo Hausmann has inspired a substantial body of literature throughout recent years. Following previous research, which explored the various drivers of economic complexity, this article contributes by exploring the interplay with financial development. For the base sample of the European Union, a positive effect of financial development on economic complexity is found, identifying the financial institutions channel as the strongest driver of the Economic Complexity Index. Critical reflection leads to the assumption that a holistic replication of the study on a global scale could retrieve non-linear characteristics of said relationship.

Keywords: Economic Complexity; Financial Development; European Economics (search for similar items in EconPapers)
JEL-codes: C51 G10 G20 O16 O30 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-eec, nep-eur and nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ipewps:323944

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