What does the product space mean for firms in the development of marine-related products?

Abstract

The differences in natural resource endowments, scientific and technological activities and historical developments result in a discrepancy between the regional marine industrial structure and the marine economic development level, and the main reason for this discrepancy can be found by analyzing the profitable activities of firms that offer advantages when competing with other firms in other countries. A firm's ability to identify the production and export of marine-related products can be viewed as an essential part of a long-term strategy aimed at supporting marine economic development. We identify a list of marine-related products that have the greatest growth potential for 107 Chinese firms and their related industries and draw a conceptual model of marine-related products at the country and firm levels using the concepts of product space and product proximity, which provides a new policy analysis tool for sustainable marine development. To achieve our goals, we conduct a regression analysis of this hypothesis. We build an improved product space for China and the 107 firms in 2011 and 2012 and calculate the maximum proximity of each marine-related product to products with high revealed comparative advantage (RCA) values for each firm. The results show that the marine-related products with the greatest proximity to the products with high RCA values exhibited the greatest growth. Finally, we also provide new applications for the development of marine-related products as a complementary policy analysis tool for China's marine economic development.