Research And Application Of Economic Complexity In International Trade Networks

The economic complexity approach uses and develops modern data analysis techniques to build measurement models inspired by complex systems science.Since its introduction,economic complexity theory has played an important role in assisting decision makers of relevant organizations in evaluation,investment and planning,but there is a lack of relevant comprehensive introductory literature in China;the classical linear iterative reflexive method-based measurement algorithm ECI has a large variability of complexity calculation results because it is too sensitive to data;moreover,the current interpretation of the classical economic complexity index ECI Most of the current interpretations of the classical economic complexity index ECI are confined to the economic level,and there are few studies on it from the perspective of different disciplines;moreover,how to provide accurate and reliable trade object selection strategies is a key issue in the process of globalized trade in the new situation.Based on this,the main contents of this paper are:(1)The review of the progress of economic complexity research in Chinese literature is written,firstly,the background of the development of economic complexity is explained;then,a systematic summary and comparative analysis of the basic theories,algorithmic models,and the development and improvement process of economic complexity are made;finally,the current problems and challenges of this research field are analyzed and corresponding suggestions are put forward.(2)Inspired by the fact that entropy is one of the main features to describe the complexity of a system,this paper proposes a more stable measurement method based on the classical economic complexity index ECI combined with the concept of entropy,which enriches the tool pool of economic complexity measurement to cope with the measurement needs of both measurement validity and higher stability.The results of the analysis of Chinese import and export trade flow data show that the method has considerable measurement validity,can produce realistic result rankings,has significant correlation with other mainstream economic complexity indices,and presents a relatively more stable performance in stability detection compared with the classical ECI.(3)Treating export trade flows as a dynamic process of resource allocation,we design a Tunable resource allocation(TRA)process to explain economic complexity and build a research bridge between resource allocation dynamics and economic complexity,which is conducive to refining economic complexity methods from different disciplinary perspectives.We apply the TRA-based economic complexity approach to fully nested triangular matrices and real country-product bipartite networks in world trade data to explain economic complexity,respectively,extending the study of economic complexity to the dynamic level.(3)The successful use of the economic complexity approach provides a more precise strategy for the selection of trade targets to grasp economic efficiency and future development potential.Using the world as a reference,a comparative analysis of the situation in the Chinese and U.S.trade markets reveals that the proximity between products in the Chinese market is increasing,and the path of export product diversification will then be easy to develop,while the U.S.market is decreasing,and the position of each exporting country in the Chinese market is closer to the average world trade position.Compared to the world market,those with significantly higher trade position in China are Nigeria,Bangladesh,Cambodia,etc.;exporters with high trade position in the U.S.have a greater gap with the world,such as Cote d’Ivoire,Kazakhstan,Kuwait,etc.In terms of products compared to the world market,the complexity of products such as non-ferrous metals in the sixth category is higher in the Chinese market,and the complexity of raw materials products in the second category is higher in the U.S.market.In the research and application of economic complexity methods in trade networks,the review literature has contributed to a certain extent to the dissemination,research and application of the methods in China;while retaining the advantages of the linear iteration of the economic complexity algorithm ECI,a more stable algorithm has been developed to meet the corresponding measurement needs;and the classical economic complexity algorithm ECI has been studied for the first time from the perspective of resource allocation dynamics.In addition,the use of ECI and other related economic complexity tools provides a comprehensive trade object selection strategy that meets current economic efficiency while taking into account future development planning,and expands the application practice of economic complexity.