Economic Complexity and Regional Growth Performance: Evidence from the Mexican Economy

Abstract

This paper uses information on the productive structure of each of Mexico’s states to calculate a measure of economic complexity using the Method of Reflections proposed by Hausmann and Hidalgo (2009). The results suggest that the country’s states differ markedly in terms of the activities they specialize in, and therefore also in terms of their economic complexity. There is also a clear regional pattern which shows that states in the north are more complex, those in the central region have an intermediate level of complexity, and those in the south have the lowest levels of complexity. As previous international studies have shown, complexity is an important factor in explaining the economic disparities observed in the country, given that its measure is positively related to both the level of wealth and the growth rate of the states. Therefore, we can assert that the dispersion of productive knowledge—measured according to the specialization of the states or the location of the various economic activities performed there—goes some way toward explaining their different patterns of growth.

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