From variety to economic complexity: empirical evidence from Italian regions

Roberto Antonietti and Chiara Burlina

No 1930, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Taking an evolutionary economic geography approach, we test whether the level of industry variety in a region affects its economic complexity. With reference to Italy, we measure variety using a Theil index of information entropy, and complexity with the Hidalgo and Hausmann index. Our results show that regions where variety grows faster also have a higher rate of growth in economic complexity. This relationship only holds in regions with low initial levels of variety and/or complexity, however, which are mainly located in the South of Italy. We suggest that product diversification, by increasing regional specialization in high-tech industries, can explain regional development and Italian North-South disparities.

Keywords: economic complexity; entropy; industry variety; unit root (search for similar items in EconPapers)
JEL-codes: O33 R11 R12 (search for similar items in EconPapers)
Date: 2019-10, Revised 2019-10
New Economics Papers: this item is included in nep-geo, nep-hme, nep-tid and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1930

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