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Progression to Higher Economic Complexity: The Role of Institutions

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Abstract

This paper attempts to examine the impact of institutional quality on economic complexity. We employ system general method of moments in a sample of 98 countries from 2002 to 2017. The empirical analysis consistently shows that (1) institutional quality has a positive impact on economic sophistication; (2) each component of institutions has a distinct effect on economic sophistication; and (3) the contribution of institutions on economic sophistication across country sub-groups is heterogeneous. The study implies that different countries require different sets of institutions for enhancing economic sophistication.

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Notes

  1. The authors are grateful for this helpful comment from an anonymous reviewer.

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  1. Banking Academy of Vietnam, Hanoi, Vietnam

    Dung Phuong Hoang & Lan Khanh Chu

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  1. Dung Phuong Hoang
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Hoang, D.P., Chu, L.K. Progression to Higher Economic Complexity: The Role of Institutions. J Knowl Econ 14, 4339–4366 (2023). https://doi.org/10.1007/s13132-022-01059-x

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