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Some new views on product space and related diversification

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  • Nomaler, Önder

    (UNU-MERIT, Maastricht University)

  • Verspagen, Bart

    (UNU-MERIT, Maastricht University)

Abstract

We aim to contribute to the literature on product space and diversification by proposing a number of extensions of the current literature: (1) we propose that the alternative but related idea of a country space also has empirical and theoretical appeal; (2) we argue that the loss of comparative advantage should be an integral part of (testing the empirical relevance of) the product space idea; (3) we propose several new indicators for measuring relatedness in the product space; and (4) we propose a non-parametric statistical test based on bootstrapping to test the empirical relevance of the product space idea.

Suggested Citation

  • Nomaler, Önder & Verspagen, Bart, 2022. "Some new views on product space and related diversification," MERIT Working Papers 2022-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2022011
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    References listed on IDEAS

    as
    1. Ricardo Hausmann & Bailey Klinger, 2007. "The Structure of the Product Space and the Evolution of Comparative Advantage," Growth Lab Working Papers 10, Harvard's Growth Lab.
    2. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
    3. Coniglio, Nicola D. & Vurchio, Davide & Cantore, Nicola & Clara, Michele, 2021. "On the evolution of comparative advantage: Path-dependent versus path-defying changes," Journal of International Economics, Elsevier, vol. 133(C).
    4. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    5. Boschma, Ron & Capone, Gianluca, 2015. "Institutions and diversification: Related versus unrelated diversification in a varieties of capitalism framework," Research Policy, Elsevier, vol. 44(10), pages 1902-1914.
    6. G. N. von Tunzelmann, 1995. "Technology and Industrial Progress," Books, Edward Elgar Publishing, number 437.
    7. Jose Antonio Alonso & Víctor Martín, 2020. "Product relatedness and economic diversification at the regional level in two emerging economies: Mexico and Brazil," Regional Studies, Taylor & Francis Journals, vol. 53(12), pages 1710-1722, July.
    8. 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.
    9. Dany Bahar & Rodrigo Wagner & Ernesto Stein & Samuel Rosenow, 2017. "The Birth and Growth of New Export Clusters: Which Mechanisms Drive Diversification?," CID Working Papers 86a, Center for International Development at Harvard University.
    10. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-1175, September.
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    12. Ron Boschma & Gianluca Capone, 2016. "Relatedness and diversification in the European Union (EU-27) and European Neighbourhood Policy countries," Environment and Planning C, , vol. 34(4), pages 617-637, June.
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    More about this item

    Keywords

    Diversification; specialization; product space; country space; path dependence of specialization; relatedness;
    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
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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