Abstract
We adapt the product-space approach of Hausmann–Hidalgo et al. to the case of Italian provinces, examining the extent to which network connectedness and centrality of a province’s exports is related to its economic performance. We construct a new Product Space Position (PSP) index which retains many of the Hausmann–Hidalgo et al. features but which is also much better suited to handling regional and provincial data. The PSP index is found to outperform other indices. Our comparison throws light on fundamental aspects of network-cognitive-distance-trade arguments. A better positioning in the export-network product space is indeed associated with better local economic outcomes.
Highlights
The centrality, positioning and connectedness of a nation’s tradeable sectors within global trade patterns are argued to be critical for a country’s growth trajectories (Hausmann and Klinger, 2006; Hausmann et al, 2007; Hidalgo et al, 2007; Hidalgo and Hausmann, 2009), and similar arguments have been put forward at the regional scale (Neffke et al, 2011)
Using province-level data from Italy, our analysis demonstrates that the existing Hausmann–Hidalgo types of approaches which are used to examine the performance of countries are less effective when discussing sub-national regional profiles in advanced economies
We aim to identify whether Product Space Position (PSP) is an important independent variable related to overall local economic prosperity GDP, local labor productivity gross value added per worker (GVA), local innovation PAT, over and above the other more conventional control variables used in urban and regional economic analysis
Summary
The centrality, positioning and connectedness of a nation’s tradeable sectors within global trade patterns are argued to be critical for a country’s growth trajectories (Hausmann and Klinger, 2006; Hausmann et al, 2007; Hidalgo et al, 2007; Hidalgo and Hausmann, 2009), and similar arguments have been put forward at the regional scale (Neffke et al, 2011) The underpinnings of this Hausmann–Hidalgo approach are based on widely held principles evident in fields such as economics, strategic management, international business and economic geography. Our findings demonstrate that a province’s good positioning in the export network product space is associated with enhanced regional development, over and above other more traditional regional economic variables such as variety, diversity, human capital and density
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