Search

• Impacts of export quality on economic progress are examined. • The role of economic complexity for economic growth is investigated. • 28 OECD country's data is utilized from 1990 to 2019. • Export quality and economic complexity induce sustainable growth. • Institutional quality is a significant determinant for economic growth. It is important to unearth the role of structural change factors for sustainable growth in developed economies. Economic complexity, export product quality, and institutional indicators represent the overall structural change and transformation in an economy. This paper probed the influence of export product quality and economics of complexity on economic growth for 28 OECD (Organization for Economic Co-operation and Development) countries using the data from 1990 to 2019. In doing so, the study employs three-panel data econometric models to investigate the role of economic complexity, export quality, and institutional quality on economic development. The paper performs the empirical tests, including the cross-sectional related dependency methods and cointegration techniques. As per the results emerging from fully modified OLS (FMOLS) and dynamic OLS (DOLS) estimation, export quality and financial development positively and significantly strongly impact growth in the long run. The empirical conclusions report detailed discussion on sustainable growth and discuss novel implications concerning product quality and institutional performance. The conclusions stress the practical implications for sustainable economic growth of OECD economies. [ABSTRACT FROM AUTHOR]

• We present a multinomial approach not previously used in the macroeconomic literature for the study of growth and industrial dynamic. • The successful growth dynamic observed during the 1995–2014 period in several emerging economies is very heterogeneous in terms of their industrial transformation. • Developed economies grew slowly and, generally, through episodes of limited industrial transformation. • The relationship between economic fitness and the countries' industrial and growth dynamics generates a path dependency in economic development. • The fitness score of a country –that moves very slowly during one or two decades– establishes the most common sequences of episodes to be observed. When analyzing countries' medium- and long-term economic performance, it is important to study jointly the dynamic of growth and the industrial evolution that determines how the productive structure changes over time. In this paper, we use the Economic Fitness metric to describe the competitiveness of the countries' industrial structure, and classify economic episodes, with five-years windows, to establish how countries grow (i.e., above or below a trend, and with a dynamic or static industrial structure.) We show a complex growth dynamic using data covering two decades (1995–2014) for a large set of countries. This pattern indicates that the observed sequences of spells vary substantially even between countries within the same growth regime (low, medium, and high). Moreover, we find a robust statistical relationship between these spells and Economic Fitness with a multinomial econometric model. In particular, we show that economies with higher fitness are more resilient since episodes of below-average growth and the net disappearance of competitive firms are less likely to happen. [ABSTRACT FROM AUTHOR]