Identifying smart strategies for economic diversification and inclusive growth in developing economies : the case of Paraguay

Pinheiro, Flávio L.; Bezerra, Mayra; Hartmann, Dominik

Identifying smart strategies for economic diversification and inclusive growth in developing economies : the case of Paraguay

dc.contributor.author	Pinheiro, Flávio L.	de
dc.contributor.author	Bezerra, Mayra	de
dc.contributor.author	Hartmann, Dominik	de
dc.date.accessioned	2024-04-08T08:57:17Z
dc.date.available	2024-04-08T08:57:17Z
dc.date.created	2019-04-09
dc.date.issued	2019
dc.description.abstract	A country’s productive structure determines its future path of economic diversification, economic growth, and income inequality. In this article, we identify Paraguay’s structural constraints and opportunities for economic diversification and inclusive growth. For this purpose, we advance methods from research on economic complexity and the product space to estimate how feasible and desirable are different types of new products and economic diversification strategies for Paraguay. To estimate the feasibility of different diversification opportunities, we measure the revealed comparative advantages and relatedness of 763 SITC products to Paraguay’s current product structure. To estimate the desirability of each product, we measure the expected level of income, economic complexity, technology and income inequality associated with these products. Our results indicate that despite Paraguay’s strong dependence on primary goods and resource-based manufactures, it has significant opportunities to diversify into more complex, high-income, and inclusive products. These opportunities include manufacturing products related to agricultural activities (such as machines for harvesting or food-processing) as well as chemical products (such as medicaments and vaccines). We present a scoreboard of feasible and desirable product options that helps to discuss different diversification strategies. Paraguay could for instance (1) only focus on the relatedness criteria; (2) further develop the products with intermediate capabilities; (3) promote diversification into related, higher income products; or (4) push towards complex and inclusive industries. Our results imply that only focusing on feasibility may lead developing countries like Paraguay further into an economic development trap, consisting in the focus on simple products and the large distance to high complexity and low inequality products. Instead promoting products that combine minimum standards regarding both feasibility and desirability criteria might be the best strategy for smart diversification and inclusive growth.	en
dc.identifier.swb	1663049440
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/6381
dc.identifier.urn	urn:nbn:de:bsz:100-opus-16088
dc.language.iso	eng
dc.relation.ispartofseries	Hohenheim discussion papers in business, economics and social sciences; 2019,04
dc.rights.license	publ-mit-pod	en
dc.rights.license	publ-mit-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_mit_pod.php
dc.subject	Smart diversification	en
dc.subject	Inclusive growth	en
dc.subject	Product space	en
dc.subject	Paraguay	en
dc.subject.ddc	330
dc.subject.gnd	Paraguay	de
dc.subject.gnd	Wirtschaftswachstum	de
dc.subject.gnd	Wirtschaftsentwicklung	de
dc.title	Identifying smart strategies for economic diversification and inclusive growth in developing economies : the case of Paraguay	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.faculty.number	3	de
local.institute.number	520	de
local.opus.number	1608
local.series.issueNumber	2019,04
local.series.title	Hohenheim discussion papers in business, economics and social sciences
local.university	Universität Hohenheim	de
local.university.faculty	Faculty of Business, Economics and Social Sciences	en
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.institute	Institute for Economics	en
local.university.institute	Institut für Volkswirtschaftslehre	de

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