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Yet another space: Why the Industry Space adds value to the understanding of structural change and economic development

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  • Koch, Philipp
  • Schwarzbauer, Wolfgang

Abstract

We introduce the Industry Space based on value-added exports as a complementary visualisation of economic development and structural cross-country differences to the established Product Space, which relies on gross exports. Since value-added exports disentangle global and national value chains, we argue they enable a more accurate and holistic depiction of an economy’s capabilities. Specifically, the Industry Space links 51 industries to each other based on the similarity in required capabilities. We emphasize the need for value-added exports by providing evidence that using gross exports significantly changes the similarities between industries. Applying the concept to comparative country case studies, we show that the Industry Space is a useful tool to investigate the economic structure between countries and over time.

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  • Koch, Philipp & Schwarzbauer, Wolfgang, 2021. "Yet another space: Why the Industry Space adds value to the understanding of structural change and economic development," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 198-213.
    • Handle: RePEc:eee:streco:v:59:y:2021:i:c:p:198-213
    DOI: 10.1016/j.strueco.2021.08.019
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    Cited by:

    1. Ben-Hur Francisco Cardoso & Eva Yamila da Silva Catela & Guilherme Viegas & Fl'avio L. Pinheiro & Dominik Hartmann, 2023. "Export complexity, industrial complexity and regional economic growth in Brazil," Papers 2312.07469, arXiv.org.
    2. Nordlund, Carl, 2023. "Transformations, trajectories and similarities of national production structures: a comparative fingerprinting approach," SocArXiv 6byxh, Center for Open Science.

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    More about this item

    Keywords

    Value-added exports; Structural change; Industry Space; Economic complexity; Economic fitness;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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