Analysis of Country Economic Growth Based on Industries Chain Position

Abstract

In contrast to the past, the trade behavior of countries has become increasingly intricate, encompassing domestic trade rooted in local markets, traditional trade centered on final exports, and value chain trade reliant on intermediate goods. To tailor their strategies to their unique circumstances, nations judiciously allocate their economic focal points across these three trade modalities, engendering distinct national development models. By discerning the varying emphases placed by countries on these three trade modes, this paper employs clustering techniques to extract and analyze divergent national development models. Additionally, this paper assesses countries’ performance in various trade activities and introduces a new indicator, Total Trade Ability (TTA), to examine the impact of these models on the economy. With our approach, one can easily distinguish how different countries develop their economies. Our findings indicate a strong correlation between economic growth and TTA. In general, countries with higher TTA tend to exhibit higher economic growth.