Transcending the geographical stickiness of complex economic activities via strategic unrelated diversification - A research article

Aug 24, 2026

Developing economies often struggle to catch up and leapfrog because industrial restructuring can be difficult to accomplish and sustain. This study pinpoints the geographical stickiness of high-complexity industries and derives an optimal industrial diversification strategy by examining industry entry and maintenance at the global level. Results show that complex industries’ geographic stickiness is driven by dependence on a larger set of related complex industries through the capabilities approach. The paper recommends strategic unrelated diversification into a small cluster of related, inter-dependent high-complexity industries to raise the likelihood of successful industrial transformation, with implications for explaining persistent restructuring failures and guiding effective upgrading.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages13

Reading Time33 min

AccessFree to download

Introduction

Capabilities approach and structural transformation

Spatial inequality and diversification proposal

Keywords and theoretical framing

Utrecht University Repository | Title | Transcending the geographical stickiness of complex economic activities via strategic unrelated diversification | | --- | --- | | Authors | Jin , Wenwan; Zhu , Shengjun; Li , Deyu; He , Canfei | | Published in | Structural Change and Economic Dynamics | | Publication Date | 2025-06 | | Link | [https://dspace.library. uu. nl/handle/1874/474657](https://dspace.library. uu. nl/handle/1874/474657) | | Citation | Jin , W, Zhu , S , Li , D & He , C 2025 , 'Transcending the geographical stickiness of complex economic activities via strategic unrelated diversification ' , Structural Change and Economic Dynamics, vol. 73, pp. 65-76. [https://doi.org/10.1016/](https://doi.org/10.1016/)[ ](https://doi.org/10.1016/)[j.strueco.2024.12.018](j.strueco.2024.12.018) | | Versions / License | Publisher version | | Rights | [https://www. uu. nl/en/university-library/license-and-reuse-conditions](https://www. uu. nl/en/university-library/license-and-reuse-conditions) | Structural Change and Economic Dynamics 73 (2025) 65–76 Contents lists available at ScienceDirect Structural Change and Economic Dynamics journal [homepage:](homepage: www.elsevier.com/locate/strueco)[ www.elsevier.com/locate/strueco](homepage: www.elsevier.com/locate/strueco) | Transcending the geographical stickiness of complex economic activities via strategic unrelated diversification | | | | | --- | --- | --- | --- | | Wenwan Jin a, Shengjun Zhub,c,* , Deyu Lid, Canfei He b,c,*
a Department of Geography and Spatial Information Technology, Ningbo University, Ningbo, 315211, PR China b College of Urban and Environmental Sciences, Peking University, Beijing, 100871, PR China
c Laboratory for Earth Surface Processes of the Ministry of Education, Peking University, Beijing, 100871, PR China d Department of Human Geography and Planning, Utrecht University, 3584 CB Utrecht, the Netherlands | | | | | A R T I C L E I N F O | | A B S T R A C T | | | Keywords:
Geographical stickiness Complex products
Product relatedness
Strategic unrelated diversification | | Developing economies often face challenges in catching up and leapfrogging due to the drawbacks of industrial restructuring. This study identifies the geographical stickiness of high-complexity industries and proposes an optimal industrial diversification strategy using a thorough examination of industry entry and maintenance atthe global level. The findings indicate that the mechanisms driving the geographical stickiness of complex industries are linked to their reliance on a larger number of related complex industries, as explained by the “capabilities approach”. Moreover, we encourage developing countries to strategically diversify into a small group of related and inter-dependent high-complexity industries simultaneously, a process called “strategic unrelated diversification”, thereby increasing the probability of industrial transformation. These findings have significant implications for explaining why certain countries struggle with industrial restructuring and how to facilitate industrial upgrading effectively. | | 1. Introduction Industrial restructuring and productive transformation have been seen as a key explanatory factor in developing economies’ catch-up and leapfrog by various studies (Hartmann et al., 2021). Several strands of the literature share a consensus that economic development relies on a process of structural transformation from low-value, labor-intensive economic activities towards high-value, technology-intensive ones. This is evident in the fields of global value chain/global production network frameworks (Gereffi, 2014; Yeung and Coe, 2015; Yeung, 2016) and evolutionary economic geography (EEG) (Boschma and Frenken, 2018). Although achieving industrial structural upgrading has numerous benefits, successful stories of developing economies catching up remain exception rather than the rule (Pinheiro et al., 2021). Most developing c

FAQs

What problem does the study address regarding developing economies?

It addresses why many developing economies fail to upgrade industries and get stuck producing low-end products, making catch-up and leapfrogging difficult.

How does the paper explain geographical stickiness of complex industries?

It links geographical stickiness to industries’ reliance on a larger number of related complex industries, explained through the capabilities approach.

What is “strategic unrelated diversification” in this research?

It is a strategy for developing countries to diversify simultaneously into a small group of related and inter-dependent high-complexity industries, increasing the probability of industrial transformation.

Aug 24, 2026

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