The great divide: economic complexity and development paths in Brazil and the Republic of Korea

Abstract

This paper uses the product space methodology to gain new perspectives on the relationship between economic complexity and economic development, illustrated by case studies of Brazil and the Republic of Korea. It takes import data as an indicator of revealed comparative disadvantage to highlight the relevance of the local market. Product space networks for each decade between 1960 and 2000 are then presented, revealing the significant changes in each country’s position in the international division of labour. Lastly, a structural development index is used to measure economic development in each country. The revealed comparative advantage and disadvantage indices indicate that while both countries had similar levels of per capita gross domestic product (GDP) in the early 1960s, the Republic of Korea saw faster growth than Brazil thanks to its early specialization in more complex, technology-intensive goods.