The Relationship Between Middle Income Trap and Structural Transformation The Case of Selected Countries

Abstract

Many studies on middle income trap draw attention to the product trap
that can be expressed as the fact that countries are stuck in the production
and export of unsophisticated products. In this sense, it is stated that the
role of a country in the production and export of sophisticated goods is one of
the determinant factors to increase the level of income. In the literature, the
concept of economic complexity, which is expressed as gaining competitiveness
of complex products in terms of production and export, is noteworthy in recent
years. In this framework, relationship between the per capita GDP and the
economic complexity is examined with regression analysis in this study for
selected countries with high-level of income. In the analysis, in which random
coefficient panel regression model is applied, a significant relationship was found
between the two variables for Austria, Finland, Hong Kong, Japan, Norway,
Singapore and Sweden.