Hierarchy in industrial structure: The cases of China and the USA

Although several studies have investigated the industrial structure from the perspective of network, the focus is mainly on the identification of key sectors, and little is known about the hierarchical structure, and its impact on economic performance. Using the World Input-Output Tables (WIOTs), this paper performs a comparative study of the hierarchy in industrial structures of China and the USA. Specifically, the hierarchy is generally confirmed in the networks of industrial structure, although in different levels for China and the USA: the level of hierarchy in industrial structure of the USA is much higher than that of China. To intuitively comprehend the evolution over time in a much visualized way, we also present the backbone network of industrial structure via minimum spanning tree (MST), leading to interesting insights about the origins of hierarchy. Further, the impact of the hierarchy in network on economic performance is also explored, and the result suggests that a hierarchy of a moderate range might be better for economic growth. (C) 2016 Elsevier B.V. All rights reserved.