Economic complexity and structural transformation

This paper proposes a methodological framework for identifying attractive product sectors and export markets in a location. We apply the framework to guide industrial policy in Mozambique – one of the world’s least complex economies. In a supply-side analysis, we first use the economic complexity methodology to identify product sectors that are important for structural transformation. In a demand-side analysis, we then use gravity models to rank the trade potential of these target products across different markets. We identify unexploited opportunities in machinery, vehicles, and transport equipment. Additionally, Mozambique’s largest trade partners show a high potential for importing its target products.

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