Industrial structure conditions economic resilience

Wenqi Duan, Joseph David Madasi, Adnan Khurshid and Dan Ma

Technological Forecasting and Social Change, 2022, vol. 183, issue C

Abstract: This study investigates the importance of the industrial structure conditions in economic resilience. To analyse this correlation, we adopt the Lotka–Volterra model to develop a novel multi-dimensional nonlinear model to capture the dynamics of an industrial ecosystem structure. Reducing our complex model to a one-dimensional form does not lower its ability to predict the optimal conditions for robust economic resilience. This study contributes to the literature by investigating the influence of industrial structure and foreign direct investment (FDI) on economic flexibility. Using 1995–2015 input–output transaction, exchange rate volatility and FDI data, the study is divided into three phases (before, during and after the global crisis) for empirical testing. The simulated numerical results reveal that industrial network characteristics can enhance resilience and circumvent economic collapse. Furthermore, upsurges in FDI and the degree of interaction strength can enhance economic resilience. Simultaneously, exchange rate volatility impedes industrial growth and suppresses system resilience. This study's results-based implications will help policymakers and business professionals to strengthen industrial systems' resilience against local and global crises.

Keywords: Complex systems; Economic resilience; Industrial topology structure; Lotka–Volterra model; Reduction method (search for similar items in EconPapers)
JEL-codes: C68 L14 L16 R1 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:183:y:2022:i:c:s0040162522004656

DOI: 10.1016/j.techfore.2022.121944

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