Papers in Evolutionary Economic Geography

January 18, 2018

# 18.07 Shooting Low or High: Do Countries Benefit from Entering Unrelated Activities?

Flávio L. Pinheiro & Aamena Alshamsi & Dominik Hartmann & Ron Boschma & César Hidalgo

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It is well known that countries tend to diversify their exports by entering products that are related to their current exports. Yet this average behavior is not representative of every diversification path. In this paper, we introduce a method to identify periods when countries enter relatively more unrelated products. We analyze the economic diversification paths of 93 countries between 1970 and 2010 and find that countries enter unrelated products in only about 7.2% of all observations. Then, we show that countries enter more unrelated products when they are at an intermediate level of economic development, and when they have higher levels of human capital. Finally, we ask whether countries entering more unrelated products grow faster than those entering only related products. The data shows that countries that enter more unrelated activities experience an increase in short-term economic growth of 0.5% per annum compared to those with similar levels of income, human capital, capital stock per worker, and economic complexity.

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May 9, 2017

# 17.09 Economic Geography in R: Introduction to the EconGeo package

Pierre-Alexandre Balland

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The R statistical software is increasingly used to perform analysis on the spatial distribution of economic activities. It contains state-of-the-art statistical and graphical routines not yet available in other software such as SAS, Stata, or SPSS. R is also free and open-source. Many graduate students and researchers, however, find programming in R either too challenging or end up spending a lot of their precious time solving trivial programming tasks. This paper is a simple introduction on how to do economic geography in R using the EconGeo package (Balland, 2017). Users do not need extensive programming skills to use it. EconGeo allows to easily compute a series of indices commonly used in the fields of economic geography, economic complexity, and evolutionary economics to describe the location, distribution, spatial organization, structure, and complexity of economic activities. Functions include basic spatial indicators such as the location quotient, the Krugman specialization index, the Herfindahl or the Shannon entropy indices but also more advanced functions to compute different forms of normalized relatedness between economic activities or network-based measures of economic complexity. By opening and sharing the codes used to compute popular indicators of the spatial distribution of economic activities, one of the goals of this package is to make peer-reviewed empirical studies more reproducible by a large community of researchers.

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