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Environmental & Development Econometrics2022 cross-section · Completed econometrics report

Structural Determinants of Economic Complexity

Poster summary

Stata 17 · OLS · cross-country data integration · LaTeX

A completed cross-country econometric report examining how human development, regulatory quality, inequality, and trade openness relate to productive complexity.

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Research question

Which structural and socioeconomic factors are associated with cross-country differences in the Economic Complexity Index?

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Methodology

Cross-sectional OLS with a developing-economy subsample, descriptive diagnostics, joint tests, and coefficient-level hypothesis tests

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Dataset

108-country 2022 estimation sample combining OEC ECI, UNDP, WGI, WID, WDI, and Heritage Foundation indicators

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Main finding

Human development, regulatory quality, trade openness, and population are positively associated with ECI; income inequality is negatively associated. The baseline adjusted R² is 0.689.

Structural Determinants of Economic Complexity

Overview

This completed group report studies the structural correlates of productive sophistication across countries in 2022. It links economic complexity to human development, institutions, inequality, trade openness, financial freedom, and population.

Research Question

Which structural and socioeconomic factors are associated with cross-country differences in the Economic Complexity Index?

Economic or Technical Motivation

Economic complexity captures accumulated productive capabilities, but its cross-country variation may reflect both market integration and the institutional and human foundations that allow knowledge to diffuse and combine.

Data

The final OLS sample contains 108 countries for 2022. Variables combine the OEC Economic Complexity Index with UNDP human-development data, World Governance Indicators, World Inequality Database measures, World Development Indicators, and financial-freedom data.

Methodology

The report uses cross-sectional OLS, descriptive statistics, correlations, joint significance tests, and a developing-economy subsample. The model includes HDI, regulatory quality, income inequality, trade openness, log financial freedom, and log population.

Main Findings

The baseline estimates report positive associations for HDI (2.363), regulatory quality (0.468), trade openness (0.0071), and log population (0.278), and a negative association for inequality (-1.012). Financial freedom is imprecise. The model reports R-squared 0.707 and adjusted R-squared 0.689. The 97-country developing-economy subsample preserves the main signs and significance pattern.

Robustness, Validation, or Model Assessment

The study reports correlations, confidence intervals, a joint F-test, and a developing-economy subsample. It also documents the limits of the small developed-economy group rather than presenting an unstable comparison.

Tools and Technologies

Stata 17, OLS, cross-country data integration, hypothesis testing, and LaTeX report production are directly evidenced.

Limitations

The 2022 cross-section cannot establish temporal ordering or causal effects. Country-level averages conceal sectoral and subnational heterogeneity, and several regressors are strongly related to one another.

Deliverables

  • Complete 36-page research report
  • Stata do-file and source workbook
  • Baseline and developing-economy regression tables
  • Descriptive and correlation analysis