Relationship between Economic Complexity Index and Human Development Index in Developed and Developing Countries

The main purpose of this article is to investigate the relationship between economic complexity and human development index in developed and developing countries. Accordingly, to measure the amount of knowledge used in a country's products, there are various indicators, including the index of economic complexity and human development. For this purpose, data on economic complexity and the Human Development Index, as well as influential indicators of institutional variables such as economic freedom, political stability and the rule of law, for 28 countries during the period 1997-2017, using The self-explanatory method is used with wide panel interrupts (Panel ARDL). The results of the test show that in developed countries there is a one-way causal relationship from the human development index to economic complexity. Therefore, according to the results, the impact of the index of human development and political stability in the long run on economic complexity is positive and significant, also the index of economic freedom in the long run has a negative and significant effect on economic complexity. These countries do not have a significant impact on economic complexity. In contrast, the findings show that in the developing country there is a one-way causal relationship from the index of economic complexity to the index of human development. Thus, economic complexity and political stability in the long run have a negative and significant effect on the human development index and the effect of the rule of law and economic freedom index on the human development index is positive and significant. JEL Classification: O17, O43, O15