How do economic policy uncertainty, geopolitical risk, and natural resources rents affect economic complexity? Evidence from advanced and emerging market economies

Dung Phuong Hoang, Lan Khanh Chu and Trung Thanh To

Resources Policy, 2023, vol. 85, issue PA

Abstract: Progressing to higher economic complexity is widely believed to be a vital economic growth strategy. While most studies examine factors that enhance the sophistication of an economy, there is limited knowledge about the obstacles to economic complexity evolution. This research aims to examine the new barriers to economic sophistication. We adopt an advanced panel quantile technique to a sample of 12 advanced economies and seven emerging market economies from 1997 to 2019. The empirical analysis shows that while economic policy uncertainty poses a threat to economic complexity evolution, interestingly, geopolitical risks bring about opportunities for upgrading economic sophistication. This study also validates the “Dutch disease” effect caused by natural resources rents in all the sampled countries. In addition, the impacts of economic policy uncertainty, geopolitical instability, and natural resources rents on economic complexity are found to be heterogeneous, not only across the quantiles of economic complexity but also between advanced and emerging market economies. Our findings provide insightful and adaptive implications for different country segments for accelerating economic sophistication.

Keywords: Economic complexity; Economic policy uncertainty; Geopolitical risk; Natural resources rents; Panel quantile estimation (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420723005676
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:jrpoli:v:85:y:2023:i:pa:s0301420723005676

DOI: 10.1016/j.resourpol.2023.103856

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().