Quantifying Subnational Economic Complexity: Evidence from Romania

Abstract

Over the last two decades, Romania has undergone strong economic growth, catching up to advanced economies and producing one of the best economic performances in the world. Along with these positive changes, industrial product diversification has increased through expanded foreign economic relations, with all of these supporting the complexity of economic activities. Even though there is a world ranking of countries showing the highest level of economic complexity, there is no information about regional contributions to the overall score in Romania. This paper fills this gap by measuring the economic complexity of Romania’s subnational areas (counties) in the last ten years. To calculate the Economic Complexity Index (ECI) at a regional level, 615 economic activities (four-digit classes according to the NACE classification) were taken into consideration, grouped into 68 cluster categories. The results show that significant changes in economic complexity have mainly occurred in less developed areas, the upper- and middle-ranked counties’ positions being relatively stable. Furthermore, we examined the impact of complexity on growth and convergence, finding that the ECI index is a good predictor both for future economic growth as well as for the evolution of income inequalities.

European Union Tools for the Sustainable Development of Border Regions

“…In the context created by the mechanisms and processes of the new regionalism, the actions carried out at the sub-national level have become an integral part of the vocabulary related to development (especially in the case of the neo-liberal model in the northern hemisphere) [27,28], highlighting the relevance of the sub-national dimension of progress and development. Post-development theorists support the need for local objectives to be prioritized in the development of any policies, instead of including individuals and communities in programs and projects created for global purposes for which they do not have the necessary power.…”

High-Technology Exports, Foreign Direct Investment, Renewable Energy Consumption and Economic Growth: Evidence from the United Arab Emirates

“…Scholars like Romer (1990) and Mankiw et al (1992) have long recognized the pivotal role of technological advancements in fostering economic growth through the accumulation of knowledge capital. In order to achieve such technological advancements, an emerging strand of literature have highlighted the role of export diversification and complexity in the composition of export products in promoting economic growth of a country (for instance, Hidalgo and Hausmann, 2009;Zhu and Li, 2017;Stojkoski and Kocarev, 2017;Sciarra et al, 2020;Balland et al, 2022;Britto et al, 2019;Udeogu et al, 2021;Le et al, 2022;Teixeira et al, 2022;Török et al, 2022;Koch, 2021;Pazham and Salimifar, 2016;Ferrarini and Scaramozzino, 2013). This ongoing focus on attaining complexity in export composition has led to the production of high technology exports that require intense research and development, skilled manpower and advanced technology.…”

Assessing economic vulnerability in South African municipalities: A focus on mining-dependent regions using the Economic Complexity Index

“…A key development in this domain is the Economic Complexity Index (ECI), introduced by Hidalgo and Hausmann (2009) based on the analysis of productive capabilities and international trade flows. This approach has global application and has been employed at sub-national levels, as seen in studies conducted in Romania (Török, Benedek & Gómez-Zaldívar, 2022;Gómez-Zaldívar & Llanos-Guerrero, 2021). The method has been extensively used in social and economic contexts, covering areas such as economic growth, population growth of cities, business cycles, human development, income inequality, labour market dynamics, foreign direct investment, and sustainability, applied across diverse geographical scales and regional databases, including the USA, Mexico, China, Brazil, Australia, Italy, New Zealand, the UK, and Romania (Gao & Zhou, 2018;Hidalgo & Hausmann, 2009;Balland & Rigby, 2017;Gómez-Zaldívar & Llanos-Guerrero, 2021).…”