Subnational economic complexity analysis: case-study of the Kaliningrad region

Abstract

Currently, the economic complexity (EC) theory is of considerable relevance. Developed and rapidly developing countries invest heavily in research and development to increase their products complexity as it brings an economy’s competitiveness and revenues to a higher level. The article presents the main results of the 2017-2019 EC analysis of a Russian exclave, the Kaliningrad region, whose trade and production specialization have changed dramatically. The study relies on the data of the Atlas of Economic Complexity, the Federal Customs Service of Russia, the Kaliningrad Regional Customs. It applies the author’s method for “cleaning” the data. The key feature of the study is the incorporation of the regional data into the global trade statistics. The analysis reveals general trends towards an increase in capabilities in low complexity products. The paper emphasizes that the regional government needs to pursue an active sectoral policy aimed at increasing the economic complexity.