prody {EconGeo}

Compute the prody index of industries from regions - industries matrices

Description

This function computes the prody index of industries from (incidence) regions - industries matrices, as proposed by Hausmann, Hwang & Rodrik (2007). The index gives an associated income level for each industry. It represents a weighted average of per-capita GDPs (but GDP can be replaced by R&D, education...), where the weights correspond to the revealed comparative advantage of each region in a given industry (or sector, technology, ...).

Usage

prody(mat, vec)

Arguments

mat

An incidence matrix with regions in rows and industries in columns

vec

A vector that gives GDP, R&D, education or any other relevant regional attribute that will be used to compute the weighted average for each industry

Value

A numeric vector representing the prody index of industries. Each value in the vector corresponds to the associated income level for an industry.

Author(s)

Pierre-Alexandre Balland [e-mail]

References

Balassa, B. (1965) Trade Liberalization and Revealed Comparative Advantage, The Manchester School 33: 99-123

Hausmann, R., Hwang, J. & Rodrik, D. (2007) What you export matters, Journal of economic growth 12: 1-25.

See Also

location_quotient

Examples

## generate a region - industry matrix
set.seed(31)
mat <- matrix(sample(0:100, 20, replace = TRUE), ncol = 4)
rownames(mat) <- c("R1", "R2", "R3", "R4", "R5")
colnames(mat) <- c("I1", "I2", "I3", "I4")

## a vector of GDP of regions
vec <- c(5, 10, 15, 25, 50)
## run the function
prody(mat, vec)