Production-Network-Diversification-and-Economic-Development

Replication files "Production Network Diversification and Economic Development" Production Diversification and Economic Development Replication materials November 2023 Jorge Miranda-Pinto, David Fleming-Muñoz, José Gloria (contact: j.mirandapinto@uq.edu.au) Files included in the replication folder • Scripts used for configurations o dom_IOloading_JEBO.m o total_IOloading_JEBO.m o output_loading_JEBO.m o cons_loading_JEBO.m o density_allmeasures_JEBO.m o density_domesticmeasures_JEBO.m o Gloria et al_JEBO_May2023.do o development_density_model_calibration_nov23_JEBO.m o development_density_model_nov23_counterfactual_JEBO.m

• Data files o master1.xlsx (OECD Input-Output tables) o master_dom1.xlsx (OECD Input-Output tables, with only domestic networks) o data_panel_95_11_JEBO.xlsx (main data set, 55 countries from 1995 to 2011)

Configuration of the main variable Density and associated measures: ● Necessary Files: ○ Matlab Scripts ■ dom_IOloading_JEBO.m ■ total_IOloading_JEBO.m ■ output_loading_JEBO.m ■ density_allmeasures_JEBO.m ■ density_domesticmeasures_JEBO.m ○ Excel files ■ master1.xlsx ■ master_dom1.xlsx

● Steps

1. ‘master1.xlsx’ and ‘master_dom1.xlsx’ contain OECD Input-Output (I-O) tables from 1995 to 2011 for all industries (including exports and imports) and for only domestic industries, respectively, across 55 countries.
2. Running the code in ‘dom_IOloading_JEBO.m’, ‘total_IOloading_JEBO.m’, and ‘output_loading_JEBO.m’ would prepare I-O matrices for calculating variables . They are styled as ‘ioYEAR’, ‘outputYEAR’ and ‘iodomYEAR’. Ensure that these matrices are stored in the same folder.
3. Once all I-O matrices have been compiled you may run code in ‘density_allmeasures_JEBO.m’ to create the Density variable and associated measures. The file ‘density_domesticmeasures_JEBO.m’ will calculate the Density measure that only considers domestic networks . Configuration of Regression Tables and Figure 2: ● Necessary Files: ■ data_panel_95_11_JEBO.xlsx
   ■ Gloria et al_JEBO_May2023.do

● Steps

1. ‘data_panel_95_11_JEBO.xlsx’ houses our main data set with all variables (see “Data section” in manuscript). Data sources are the World Bank database, World Governance Indicators, and Penn World Tables. Variables were collected for each of the 55 OECD countries in our analysis, with as many data points as possible from 1995 to 2011. We find the data to be strongly balanced.
2. Once ‘data_panel_95_11_JEBO.xlsx’ has been imported into STATA, you may run the code in ‘Gloria et al_JEBO_May2023.do’. This will result in all tables and Figure 2 in manuscript.

Configuration of Counterfactuals and their associated figures: ● Necessary Files: ■ development_density_model_calibration_nov23_JEBO.m ■ development_density_model_nov23_counterfactual_JEBO.m

● Steps

1. ‘development_density_model_calibration_nov23_JEBO.m’ performs the calibration of varrho_M, the love of diversification parameter.
2. ‘development_density_model_calibration_nov23_JEBO.m’ simulate long series of each of the four economies we use in the counteractuals. The parameters epsQ, varrhoM, sigma_z, and the selected countries must be changed according to the numbers stated in the paper.

Codebook Variable Definition Source ECI+ Economic Complexity Index + Hartmann et al complexity index + dens1_dom domestic network density threshold 1 OECD I-O DATA dens1 total network density threshold 0.0005 OECD I-O DATA dens2 domestic network density threshold 0.001 OECD I-O DATA dens3 total network density threshold 0.005 OECD I-O DATA service service sector share OECD I-O DATA dens4 total network density threshold 0.00001 OECD I-O DATA for_io Forward IO linkages OECD I-O DATA back_io Backward IO linkages OECD I-O DATA nr natural resources OECD I-O DATA trade trade to GDP world bank gdppc GDP per-capita world bank control of corruption control of corruption The Worldwide Governance Indicators Regulatory Quality Regulatory Quality The Worldwide Governance Indicators Political Stability Political Stability The Worldwide Governance Indicators Gov't Effectiveness Government Effectiveness The Worldwide Governance Indicators voice_account voice and accountability The Worldwide Governance Indicators rule_of_law The Worldwide Governance Indicators size_fin production financial sector / total production OECD I-O DATA schooling Mean years of schooling (years) World Bank population population World bank Mean years of schooling (years) Avg Years of Schooling World Bank cap_stock Capital Stock Penn World Tables cou_code country code N/A