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Tell me what you export today and I will tell you what you will export tomorrow: The Product Space and the Evolution of Country pattern of specialization

Author

Listed:
  • Antonella Chiappelo
  • Alejandro Danón
  • Guillermina Marto
  • Nicolás Pinto
Abstract
Countries pattern of specialization and its evolution has been economic area of notable interest by academy and policy makers. Moreover, many authors show that economies grow by improving the number and complexity of the products that they produce. Hidalgo, Klinger, Barabasi and Hausmann (2007) constructed the Product Space, a network that maps the connection, between every product worldwide traded, in order to explain the evolution of countries pattern of specialization. However, this matrix estimates a conditional probability of exporting products using a symmetrical approach, that tends to punish more tradable products. In order to improve the predictions of the evolution of country productive structure, we propose an asymmetrical measure, assuming that the conditional probability of exporting a product P given P ́ is exported is not the same as the reverse. Consequently, this new measure predicts nearly 40% of the developed products and more than 70% of the declined products.

Suggested Citation

  • Antonella Chiappelo & Alejandro Danón & Guillermina Marto & Nicolás Pinto, 2019. "Tell me what you export today and I will tell you what you will export tomorrow: The Product Space and the Evolution of Country pattern of specialization," Asociación Argentina de Economía Política: Working Papers 4171, Asociación Argentina de Economía Política.
    • Handle: RePEc:aep:anales:4171
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    References listed on IDEAS

    as
    1. Ricardo Hausmann & Jasmina Chauvin, 2015. "Moving to the Adjacent Possible: Discovering Paths for Export Diversification in Rwanda," CID Working Papers 294, Center for International Development at Harvard University.
    2. Hausmann, Ricardo & Klinger, Bailey, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," Working Paper Series rwp06-041, Harvard University, John F. Kennedy School of Government.
    3. Frank Neffke & Martin Henning & Ron Boschma, 2011. "How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions," Economic Geography, Taylor & Francis Journals, vol. 87(3), pages 237-265, July.
    4. Hartmann, Dominik & Guevara, Miguel R. & Jara-Figueroa, Cristian & Aristarán, Manuel & Hidalgo, César A., 2017. "Linking Economic Complexity, Institutions, and Income Inequality," World Development, Elsevier, vol. 93(C), pages 75-93.
    5. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    6. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    7. Balassa, Bela, 1986. "Comparative Advantage in Manufactured Goods: A Reappraisal," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 315-319, May.
    8. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Product Space; Economic Development; Trade;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • F1 - International Economics - - Trade

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