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Progression to Higher Economic Complexity: The Role of Institutions

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  • Dung Phuong Hoang

    (Banking Academy of Vietnam)

  • Lan Khanh Chu

    (Banking Academy of Vietnam)

Abstract

This paper attempts to examine the impact of institutional quality on economic complexity. We employ system general method of moments in a sample of 98 countries from 2002 to 2017. The empirical analysis consistently shows that (1) institutional quality has a positive impact on economic sophistication; (2) each component of institutions has a distinct effect on economic sophistication; and (3) the contribution of institutions on economic sophistication across country sub-groups is heterogeneous. The study implies that different countries require different sets of institutions for enhancing economic sophistication.

Suggested Citation

  • Dung Phuong Hoang & Lan Khanh Chu, 2023. "Progression to Higher Economic Complexity: The Role of Institutions," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4339-4366, December.
    • Handle: RePEc:spr:jknowl:v:14:y:2023:i:4:d:10.1007_s13132-022-01059-x
    DOI: 10.1007/s13132-022-01059-x
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    More about this item

    Keywords

    Dynamic panel; Economic complexity; Institutions; Productivity knowledge; System GMM;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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