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Empirical Study on Product Complexity, Product Density and Industrial Upgrading: Based on Product Space View

【Authors】
MA Haiyan,YU Mengyu
【WorkUnit】
China University of Geosciences(Wuhan), 430074.
【Abstract】

The rising view of product space interprets product complexity and product density from the perspective of capabilities. Based on the product space theory, this paper studies the effects on industrial upgrading brought by product complexity, product density and the structural features of their interaction. Using the panel data of SITC 4-digit codes of 794 kinds of products from 148 countries in the global commodity trade from 1962 to 2015, the paper carries out an empirical analysis through OLS and Probit regression and the results areas follows: (1)The more complicated the product is, the higher the difficulty coefficient of industrial upgrading becomes, and the lower the possibility of realizing industrial upgrading will be; however, the more complicated the product is, the higher the capability to retain the current advantage of the industry will be, which plays a significant role in preventing the industry from losing its advantages. (2)The higher the density of industrial products is, the smaller the jump range will be, which is conducive to the realization of industrial upgrading; at the same time, the higher the density of industrial products is, the lower the risk of product transformation will be, which can accelerate the pace of outdated industry exiting the market. (3)Product complexity and product density interact with each other, which has a significant positive impact on industrial upgrading and adjustment of economic structure. Therefore, industrial upgrading is a systematic program based on overall capability network,and by enhancing the product complexity and product density, emphasizes the interaction between the forward-looking top-level design and capability building, which can help a country to seek a better global position. Based on the perspective of product structure, this paper helps to promote the research of industrial upgrading from “quantitative” analysis of the total volume of the industry to the “qualitative” rule based on product pattern and multi-dimensional interaction.

JEL:F14

【KeyWords】
Product Complexity, Product Density, Industrial Upgrading, Product Space View