Twin transition trade based on multi-dimensional economic complexity

Abstract

The transition towards a productive structure characterised by the growing importance of greener and digital products poses significant challenges for countries. The alignment of such shifts with the broader dimensions of sustainable development — economic growth, social inclusion, and environmental protection — remains a central concern. Building on a multi-dimensional economic complexity approach (Nomaler & Verspagen, 2024b, 2024d), this article explores the implications of twin transition export and import specialisation for sustainable development and its role in reinforcing path-dependency across 80 countries, 2000–2018. The results suggest that an export and import productive structure based on twin transition products exhibits different economic performance, sustainability, and inequality implications. Productive specialisation in these products has been path-dependent, with a low engagement of developing countries, reinforcing the core-periphery trade division. Furthermore, results suggest that developments in digital and green technological paradigms mainly take place in a selected number of countries that are already highly developed.