Economic Complexity and Regional Growth Performance: Evidence from the Mexican Economy

Abstract

This paper uses information on the productive structure of each of Mexico's states to calculate a measure of economic complexity using the Method of Reflections proposed by Hausmann and Hidalgo (2009). The results suggest that the country's states differ markedly in terms of the activities they specialize in, and therefore also in terms of their economic complexity. There is also a clear regional pattern which shows that states in the north are more complex, those in the central region have an intermediate level of complexity, and those in the south have the lowest levels of complexity. As previous international studies have shown, complexity is an important factor in explaining the economic disparities observed in the country, given that its measure is positively related to both the level of wealth and the growth rate of the states. Therefore, we can assert that the dispersion of productive knowledge-measured according to the specialization of the states or the location of the various economic activities performed there-goes some way toward explaining their different patterns of growth.

Economic complexity and fertility: insights from a low fertility country

“…In recent years, the notion of EC has gathered increasing attention within the literature because it has proved to be highly predictive of future economic growth. Since Hidalgo and Hausmann ( 2009 ), many other scholars have followed the framework in different areas (Balland et al, 2020 ), applying the concept to products – as in the original work (Hartmann et al, 2017 ; Zhu & Li, 2017 ) – to patents (Balland et al, 2019 ; Balland & Rigby, 2017 ; Petralia et al, 2017 ) and to industries (Chávez et al, 2017 ; Mealy et al, 2019 ). While the first studies using the concepts and methodology of EC were developed at the national level (Felipe et al, 2012 ; Hidalgo & Hausmann, 2009 ), EC research has more recently addressed smaller geographical units, such as regions (Chávez et al, 2017 ; Gao & Zhou, 2018 ), provinces (Reynolds et al, 2018 ) or cities (Balland et al, 2020 ; Balland & Rigby, 2017 ).…”

“…Since Hidalgo and Hausmann ( 2009 ), many other scholars have followed the framework in different areas (Balland et al, 2020 ), applying the concept to products – as in the original work (Hartmann et al, 2017 ; Zhu & Li, 2017 ) – to patents (Balland et al, 2019 ; Balland & Rigby, 2017 ; Petralia et al, 2017 ) and to industries (Chávez et al, 2017 ; Mealy et al, 2019 ). While the first studies using the concepts and methodology of EC were developed at the national level (Felipe et al, 2012 ; Hidalgo & Hausmann, 2009 ), EC research has more recently addressed smaller geographical units, such as regions (Chávez et al, 2017 ; Gao & Zhou, 2018 ), provinces (Reynolds et al, 2018 ) or cities (Balland et al, 2020 ; Balland & Rigby, 2017 ). These studies suggest that regions or provinces may specialize into different activities following the industrial and technological trajectories driven not only from their countries’ policies, but also by territorial specificities (e.g., the availability of raw materials or geographical characteristics).…”

“…Many studies have demonstrated the strong relationship between EC and several economic and social conditions. For example, EC increases gross domestic product (GDP) (Chávez et al, 2017 ; Poncet & de Waldemar, 2013 ), and knowledge and innovation (Balland & Rigby, 2017 ; Petralia et al, 2017 ). Furthermore, EC has been shown to reduce economic and social inequality (Hartmann et al, 2017 ).…”

“…In this study, EC is measured following the methodology developed by Hidalgo and Hausmann ( 2009 ), then refined by Balland and Rigby ( 2017 ), using information on the diversification of the specializations of Italian provinces, as well as these specializations’ ubiquity. We measured the EC index (ECI) using employment data (Chávez et al, 2017 ; Mealy et al, 2019 ), rather than either export (Hidalgo & Hausmann, 2009 ) or patents data (Balland & Rigby, 2017 ; Petralia et al, 2017 ). We did so in order to construct a measure of complexity that better acknowledges the productive structure of the provinces (Gao & Zhou, 2018 ).…”

Subnational economic complexity analysis: case-study of the Kaliningrad region

“…However, most studies on economic complexity are conducted at the national level, which primarily stems from the availability of trade statistics. In recent years, there have been works on subnational economic complexity (for example, [7,8,9,10]), however, it is not always possible to apply the methods they propose to regions in other countries due to national specifics of statistical recordings.…”