Dynamics of economic complexity in Canada: a multifaceted long-term analysis

Abstract

This research investigates the multifaceted dynamics shaping Canada's economic complexity by examining key variables from 1995 to 2022. Our comprehensive model incorporates Gross Domestic Product (GDP), Research and Development (RD), Trade (TRD), Education (EDU), Political Stability (PS), and Government Effectiveness (GE), providing a holistic understanding of their interconnections. Employing various econometric methodologies, including VECM, FMOLS, CCR, and DOLS, we analyze the long-term relationships and uncover nuanced insights. Results reveal that all the variables positively and significantly impact Economic Complexity across various estimation methods, suggesting an overall increase in economic complexity.