Economic complexity and regional inequalities: good news for some, bad news for others

• Autor(a) principal: Arthur Ribeiro Queiroz
• Data de Publicação: 2023
• Tipo de documento: Dissertação
• Idioma: por
• Título da fonte: Repositório Institucional da UFMG
• Texto Completo: http://hdl.handle.net/1843/62822
• topic: Relatedness; Complexity; Diversification; Employment Multipliers; Desenvolvimento regional; Disparidades regionais; Economia

This master’s thesis investigates the phenomenon of related diversification in Brazilian micro-regions, with a specific focus on its unequal nature. The research highlights that relatedness not only drives the diversification process but also plays a significant role in exacerbating regional inequality. Chapter 1 establishes the theoretical foundations that define Economic Geography as an Evolutionary Science. This perspective emphasizes that regional economic development results from structural changes occurring over time at various levels, such as firms, sectors, and institutions. Based on this framework, the thesis argues that related diversification can intensify inequalities between regions due to path dependence, which restricts the production of complex sectors to regions already possessing complexity. Chapter 2 empirically investigates the influence of relatedness and complexity on the entry and exit of firms in regions, considering different levels of complexity. The research finds that regions are more likely to start producing in sectors related to their existing portfolio and more likely to stop producing in less related sectors. Furthermore, the level of regional complexity has a notable impact on the diversification process. In highly complex regions, greater sectoral complexity increases the probability of entry but has minimal impact on the probability of exit. On the other hand, in less complex regions, the greater complexity of the sector decreases the probability of entry and contributes significantly to its exit. Chapter 3 examines the implications of this process on regional job creation. The research adapts the methodology of Moretti and Thulin (2013) to measure local employment multipliers for complex and non-complex sectors. The results indicate that the complex sector has higher employment multipliers. However, the multipliers vary according to the complexity of the regions, with complex sector multipliers being more expressive in already complex regions. The thesis concludes by emphasizing the political implications of the research results. The uneven nature of related diversification calls for targeted policies to address development disparities across regions. Policymakers must create opportunities for less complex regions to develop the capabilities needed to diversify into complex sectors, thus breaking the retrograde development cycle.