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Multi-criteria analysis of economic complexity transition in emerging economies: The case of Paraguay

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  • González, Arturo
  • Ortigoza, Eduardo
  • Llamosas, Cecilia
  • Blanco, Gerardo
  • Amarilla, Raúl

Abstract

Like many emerging economies, the productive structure of the Paraguayan economy is not complex. It relies extensively on low value-added activities in the primary sector such as agriculture and cattle ranching. These activities have a lower return in terms of economic and social benefits than other potential productive activities and do not contribute to increasing capability accumulation. In this paper we present a tool to support the identification of strategic sectors and products which if taken advantage of, could leverage development through the accumulation of productive capabilities. Our guiding question is: Which productive sectors should be promoted to foster economic development in Paraguay through a transition towards a more complex economy? To answer this question, we use concepts from the Economic Complexity theory to identify new products and cluster them based on the Product Space methodology for the determination of potential products and combine it with the Analytic Hierarchy Process (AHP) for multicriteria analysis considering multiple criteria. In doing so, our proposed methodology contributes to both the Economic Complexity and the AHP literature. Through this combination, we tackle the multiplicity of juxtaposed criteria, which should be considered at the prioritization stage in the crafting of economic restructuring measures according to the country's capabilities. Our evaluation showed that the combination of the approaches is useful, and for Paraguay's case, it helped identify sectors, which, if promoted by policymakers, could help boost economic development through complexity and capability accumulation.

Suggested Citation

  • González, Arturo & Ortigoza, Eduardo & Llamosas, Cecilia & Blanco, Gerardo & Amarilla, Raúl, 2019. "Multi-criteria analysis of economic complexity transition in emerging economies: The case of Paraguay," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:soceps:v:68:y:2019:i:c:s0038012117300289
    DOI: 10.1016/j.seps.2018.02.004
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    References listed on IDEAS

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    Cited by:

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    2. Francesco Riccioli & Roberto Fratini & Claudio Fagarazzi & Mario Cozzi & Mauro Viccaro & Severino Romano & Duccio Rocchini & Salomon Espinosa Diaz & Clara Tattoni, 2020. "Mapping the Recreational Value of Coppices’ Management Systems in Tuscany," Sustainability, MDPI, vol. 12(19), pages 1-18, September.
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    4. Liu, Haiyue & Wang, Cangyu & Zhang, Qin & Wang, Yile, 2024. "The impact of Chinese overseas industrial parks on the productive capability of BRI host countries," China Economic Review, Elsevier, vol. 85(C).
    5. Festus Fatai Adedoyin & Nnamdi Nwulu & Festus Victor Bekun, 2021. "Environmental degradation, energy consumption and sustainable development: Accounting for the role of economic complexities with evidence from World Bank income clusters," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2727-2740, July.
    6. Nguyen, Canh Phuc, 2021. "Gender equality and economic complexity," Economic Systems, Elsevier, vol. 45(4).
    7. Irene Sánchez Ondoño & Francisco Cebrián Abellán & Juan Antonio Garcia-Gonzalez, 2021. "The Cadastre as a Source for the Analysis of Urbanization Dynamics. Applications in Urban Areas of Medium-Sized Inland Spanish Cities," Land, MDPI, vol. 10(4), pages 1-23, April.
    8. Jorge de Andrés-Sánchez & Angel Belzunegui-Eraso & Francesc Valls-Fonayet, 2021. "Assessing Efficiency of Public Poverty Policies in UE-28 with Linguistic Variables and Fuzzy Correlation Measures," Mathematics, MDPI, vol. 9(2), pages 1-25, January.

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