Page 30 - The Atlas of Economic Complexity

MAPPING PATHS TO PROSPERITY | 31

t e c h n I c a l B o x 3 . 2 : e c o n o m I c c o m p l e x I t y:
t h e v o l u m e a n d c o n c e n t r at I o n o f e x p o r t s a n d c o u n t r y s I z e

this box explores the robustness of the impact of the economic Complex- eCi on growth remains strong and significant. Column 3 introduces export as
ity index on growth. While the eCi is constructed using export data, its rela- a share of gDp. We use this as a measure of openness. Column 4 includes the
tionship with future growth is not driven by export volumes or concentration. herfindahl-hirschman index as a measure of export concentration. Column 5
to show this, we start with our basic growth equation (table 3.2.1, column 1). includes the log of initial population as a measure of size. this is equivalent to
Column 2 adds to this equation the increase in the real value of the exports introducing total gDp, given that we are already controlling for gDp per capita.
of goods and services in the decade in question as a fraction of initial gDp. the contribution to growth of the variables introduced in columns 3, 4 and 5 are
exports are a component of gDp, and therefore, we expect them to contribute estimated to be very close to zero, are not statistically significant and do not
to growth. nevertheless, after including the increase in exports, the effect of affect the ability of the eCi to predict future economic growth.

TA B L E 3 . 2 . 1
Annualized growth in GDP pc (by decade)

(1978-1988, 1988-1998, 1998-2008)
VARIABLES (1) (2) (3) (4) (5)

Initial Economic Complexity Index (ECI) 0.04430*** 0.03005*** 0.04240*** 0.04143*** 0.04389***
(0.009) (0.007) (0.008) (0.010) (0.009)
[ECI] X [Income per capita, log] -0.00371*** -0.00244*** -0.00345*** -0.00354*** -0.00381***

(0.001) (0.001) (0.001) (0.001) (0.001)
Increase exports (goods and services) 0.04549***

- in constant dollars (as a share of initial GDP) (0.007)
Exports to GDP 0.00009
(0.000)

Export Concentration -0.00890
(0.008)
Population, log 0.00168

(0.001)
Initial Income per capita, log -0.00638*** -0.00562*** -0.00729*** -0.00611*** -0.00558***
(0.001) (0.001) (0.001) (0.001) (0.001)

Increase in natural resource exports 0.03682*** 0.00169 0.03441*** 0.03699*** 0.03758***
- in constant dollars (as a share of initial GDP) (0.010) (0.005) (0.008) (0.010) (0.010)

Constant 0.08251*** 0.06741*** 0.08616*** 0.08145*** 0.04878**
(0.011) (0.011) (0.011) (0.011) (0.022)
Observations 291 260 284 291 291

R 2 0.434 0.584 0.449 0.436 0.440
Year FE Yes Yes Yes Yes Yes
Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1