Growth networks

We map the relationship between products in global trade and the products a country exports as a network to devise a measure of the density of links between the products in a country's export basket and a measure of network proximity from a country's export basket to products that a country does not export. The density measure is a proxy for synergies between the products in a country's export basket. The network proximity measure is an indicator of how difficult it is likely to be for a given country to move from its current product specialization to new products. We find that density and network proximity are together of importance for a poor country to move to higher income products and experience higher growth rates. Higher network proximity is associated with a greater likelihood of experiencing growth acceleration, but the positive effect of density tapers off at higher values.