Using product space to connect local products to foreign markets: paths for export basket diversification of the Brazilian state of Minas Gerais

Otávio Rezende, Marcelo Borges, Josiane Rafaella Faleiro, Leandro Collares and à talo Daldegan de Oliveira

Global Business and Economics Review, 2023, vol. 29, issue 2, 133-154

Abstract: The export basket is a key indicator of the economic development of a country (Hausmann et al., 2014). Therefore, export-oriented policies must be adopted to diversify exports and increase their volume. This study aims to identify sectors and markets that deserve support and investments based on the complexity index. We apply the product space methodology to select products with a latent competitive advantage and a high degree of sophistication that could diversify the Minas Gerais export basket. This application is based on the economic complexity theory, the product space, and economic indicators provided by the Dataviva platform. Results yielded include 12 products that could be exported by the state and their competitiveness levels in different markets. Sectors with latent potential and their behaviour in foreign markets derive from empirical analysis. The two main contributions of this work are the identification of products made in Minas Gerais with latent comparative advantage and the target market classification for these products.

Keywords: economic complexity; competitiveness; comparative advantage; product space; priority markets. (search for similar items in EconPapers)
Date: 2023
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