Abstract
When a country undergoes industrialisation or modernisation, it will manifest as structural change. For a government to have a role in structural change and for businesses to become a successful driver in economic growth—these are premised on the ability of the government and businesses to identify the direction for structural change as well as the industry with the best comparative advantage potential at different stages. However, to discover the latent comparative advantage of an industry is not an easy task.
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Notes
- 1.
These tools and methodologies include theories on comparative advantage, spearhead industries, import substitution, and imitation.
- 2.
This practice of using output to reflect on a country’s comparative advantage can be traced back to a time when B. Balassa first proposed revealed comparative advantage in 1963.
- 3.
In the product space diagram, the connection (edge) between the nodes is constructed using the standard international trade classification (revision 3) (SITC rev 3) 5-digit product code as nodes and based on the adjacent product matrix elements, i.e. the degree of proximity of each pair of products. To reflect that all the products are effectively connected, we first mapped the maximum spanning tree that connects all the product nodes. From this, we took the edges with a proximity value greater than a certain threshold (0.55) and add them to the maximum spanning tree to finally form the product space diagram. Proximity values that are non-essential for forming the edges of the maximum spanning tree, of less than the specified threshold, are not taken into consideration for now.
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Zhang, Q., Li, H. (2018). Identify Opportunities for Industrial Upgrading. In: Zhang, Q. (eds) Transforming Economic Growth and China’s Industrial Upgrading. Research Series on the Chinese Dream and China’s Development Path. Springer, Singapore. https://doi.org/10.1007/978-981-13-0962-5_6
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DOI: https://doi.org/10.1007/978-981-13-0962-5_6
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