Identification of industrial investment opportunities with economic complexity. A case study of selected provinces (West Adarbaijan, Ilam, Kurdistan and Kermanshah).

Subject Areas : Industrial Management

Shadi Ghiasi ¹ , Heirsh soltanpanah ² , adel fatemi ³

1 - PhD Candidate, Department of Industrial Management, Sanandaj Branch, Islamic Azad University, Sanandaj, Iran
2 - Department of Management, Sanandaj Branch, Islamic Azad University, Sanandaj, Iran
3 - Assistant Professor, Department of Statistics, Sanandaj Branch, Islamic Azad University, Sanandaj, Iran

Received: 2024-01-21 Accepted : 2024-05-13 Published : 2024-06-19

Keywords: Industrial planning, economic complexity, product space, comparative advantage,

Abstract :

The importance of industrialization in any society is such that many economists consider industrial development as the main development factor of a country. The industrial sector is able to play a key role in providing many necessities of human life and the economic growth of societies by taking advantage of concentrated physical capital, natural resources and raw materials, manpower and technical knowledge. The scarcity of financial resources in Iran's economy has intensified in the last few years, and the optimal direction of limited funds and the correct selection of economic sectors for investment is a necessary thing, and the industrial planning of regions within the framework of a systemic approach is to determine the growth pattern for that region in accordance with its potentials. It is of special importance. In this article, by applying the theory of product space and network science and using information related to the production structure of selected provinces of Iran in the years 2013-2017 related to thirty-two products based on ISIC codes, it has been tried in a systematic approach to produce products with an obvious relative advantage. The selected provinces of Iran have been identified and the path and roadmap of industrial development of these provinces have been drawn. Then, the probability of diversification of products without revealed relative advantage was calculated for all the selected provinces and the industrial development path of the selected provinces was determined based on the greedy strategy. The results of the research showed that among the 32

References:

Alshamsi, A., Pinheiro, F. L., & Hidalgo, C. A. (2018). Optimal diversification strategies in the networks of related products and of related research areas. Nature communications, 9(1), 1328.
Baseri, B., Asghari, N., & Kia, M. (2011). The comparative analysis of knowledge based economy components on economic growth in some selected countries. Iranian Journal of Economic Research, 16(47), 1-29.
De Chalendar, K. K. O. P., & Giraud, M. (2017). Economic complexity and product space of Visegrad countries: a new perspective on Czech Republic, Hungary, Poland and Slovakia (Doctoral dissertation, Massachusetts Institute of Technology).
European Commission. (2020). Smart Specialization: Strengthening Innovation in Europe’s Regions. Factsheet, Smart Specialization Platform, Regional and Urban Policy.
González, A., Ortigoza, E., Llamosas, C., Blanco, G., & Amarilla, R. (2019). Multi-criteria analysis of economic complexity transition in emerging economies: The case of Paraguay. Socio-Economic Planning Sciences, 68, 100617.
Hausmann, R., & Chauvin, J. (2015). Moving to the adjacent possible: Discovering paths for export diversification in Rwanda. CID Working Paper Series.
Hausmann, R., Goldstein, P., Grisanti, A., O'Brien, T., Tapia, J. A., & Santos, M. A. (2020). A roadmap for investment promotion and export diversification: The case for Jordan. CID Working Paper Series.
Hidalgo, C. A., & Hausmann, R. (2009). The building blocks of economic complexity. Proceedings of the national academy of sciences, 106(26), 10570-10575.
Hidalgo, C. A., Klinger, B., Barabási, A. L., & Hausmann, R. (2007). The product space conditions the development of nations. Science, 317(5837), 482-487.
Khosravi, A., Daei-Karimzadeh, S., Shahmoradi, B., & Soltanpanah, H. (2020). Optimizing the Export Diversification Strategy of Iran's Chemical Products Using Product Spaces and Economic Complexity Theories. Iranian Journal of Economic Studies, 9(2), 595-621.
Khosravi, Anvar and Soltanpanah, Heirsh. (2022). Application of Economic Complexity Theory in Industrial Policy Making. Journal of Strategic Management in Industrial Systems, 16(58), 216-227.
Li, S., Li, X., Lang, W., Chen, H., & Huang, X. (2021). The spatial and mechanism difference in the export evolution of product space in global countries. Sustainability, 13(4), 2255.
Parsipoor, H., Hoseinzadh, A., & Agheli Moghaddam, H. (2022). Ranking and analysis of the level of development of Iran's provinces. Geographical Engineering of Territory, 6(4), 751-766.
Petralia, S., Balland, P. A., & Morrison, A. (2017). Climbing the ladder of technological development. Research Policy, 46(5), 956-969.
Pitigala, N., & Lopez-Calix, J. (2021). Trade policy options for export diversification: The case of Mali, Chad, Niger, and Guinea. Journal of Infrastructure, Policy and Development, 4(2), 261-286.
Rubbo, P., Picinin, C. T., & Pilatti, L. A. (2018). Knowledge management practices and economic complexity in BRIC countries from 2001 to 2014. International Journal of Knowledge Management Studies, 9(1), 1-17.
Saeedi, R., Moghaddasi, R., Nessabian S., Damanjeshideh, M. (2022). Calculation and Analysis of Economic Complexity Index in Iran’s Provinces. Quarterly Journal of Fiscal and Economic Policies (Qjfep), 10(38),147-186.
Sezai, A. (2020). Evolution of the product space and a new proposal for Turkeys export incentive system. Turkey: Presidency of Strategy and Budget.
Sørensen, B. B., Estmann, C., Sarmento, E. F., & Rand, J. (2020). Economic complexity and structural transformation: the case of Mozambique (No. 2020/141). WIDER Working Paper.