Beyond Herfindahl: Fitness and GDP correlation.
We try to explain why the model does not predict positive velocities along the Complexity axis in the top left part of the plane (see Fig 1). We look at the exporter set of products. For each product p, we take its top 30% exporters. We then run a regression of these countries’ r(GDPpc) vs. r(Fitness), and measure the Spearman correlation coefficient R2. We finally average the coefficients per box. This figure shows the pattern formed by the indicator on the RCLP. It is clearly visible that products in the top left corners of the plane have exporters with high GDPpc, but both high and low Fitness. Losing low-Fitness exporters causes them to increase their Complexity, and this generates positive velocities along the horizontal axis. Products in the bottom right corner are much more homogeneous, having only high-Complexity exporters, and undergo less change in Complexity. This figure refers to the Feenstra dataset.
