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Open AccessArticle

Subnational Analysis of Economic Fitness and Income Dynamic: The Case of Mexican States

1
Centro de Investigación y Docencia Económica, Ciudad de México 01210, Mexico
2
Colegio de Postgraduados, Estado de México 56230, Mexico
*
Author to whom correspondence should be addressed.
Entropy 2018, 20(11), 841; https://doi.org/10.3390/e20110841
Received: 13 July 2018 / Revised: 18 September 2018 / Accepted: 29 October 2018 / Published: 2 November 2018
(This article belongs to the Special Issue Economic Fitness and Complexity)
In recent years, analytical tools of network theory have provided strong empirical support to the well-known hypothesis that regions develop through the local learning of capabilities (tacit productive knowledge). In this paper, we compare two indexes of competitiveness (or accumulated capabilities) for a subnational database of 32 Mexican states in the period 2004–2014. We find that Endogenous Fitness (i.e., region fitness and product complexity are derived jointly using only a Mexican exports database) has a better performance than Exogenous Fitness (i.e., product complexity comes from a world exports database and fitness is the sum of the complexity scores for the region’s competitive products). The performance criterion is established with the indicator’s capacity to meet a requirement of growth predictability: the existence of at least one laminar (ordered) regime in the fitness–income plane. In the Mexican data, Endogenous Fitness is a reliable predictor of per capita GDP in two distinct areas of the plane: one of continuous progress and opportunities, and another of stagnation and deteriorating fitness. The predictive capacity of this indicator becomes clear only when the metrics’ calculations are filtered by removing raw petroleum or oil-dependent states, while such capacity is robust to the inclusion of tourism—another important industry of the Mexican economy. View Full-Text
Keywords: economic fitness; complexity; regional development; growth forecasting; Mexican economy economic fitness; complexity; regional development; growth forecasting; Mexican economy
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Castañeda, G.; Romero-Padilla, J. Subnational Analysis of Economic Fitness and Income Dynamic: The Case of Mexican States. Entropy 2018, 20, 841.

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