Yet another space: Why the Industry Space adds value to the understanding of structural change and economic development

Philipp Koch and Wolfgang Schwarzbauer

Structural Change and Economic Dynamics, 2021, vol. 59, issue C, 198-213

Abstract: We introduce the Industry Space based on value-added exports as a complementary visualisation of economic development and structural cross-country differences to the established Product Space, which relies on gross exports. Since value-added exports disentangle global and national value chains, we argue they enable a more accurate and holistic depiction of an economy’s capabilities. Specifically, the Industry Space links 51 industries to each other based on the similarity in required capabilities. We emphasize the need for value-added exports by providing evidence that using gross exports significantly changes the similarities between industries. Applying the concept to comparative country case studies, we show that the Industry Space is a useful tool to investigate the economic structure between countries and over time.

Keywords: Value-added exports; Structural change; Industry Space; Economic complexity; Economic fitness (search for similar items in EconPapers)
JEL-codes: F14 F63 O11 O14 O57 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:59:y:2021:i:c:p:198-213

DOI: 10.1016/j.strueco.2021.08.019

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