Entropic measure unveils country competitiveness and product specialization in the World trade web

We show how the Shannon entropy function can be used as a basis to set up complexity measures weighting the economic efficiency of countries and the specialization of products beyond bare diversification. This entropy function guarantees the existence of a fixed point which is rapidly reached by an iterative scheme converging to our self-consistent measures. Our approach naturally allows to decompose into inter-sectorial and intra-sectorial contributions the country competitivity measure if products are partitioned into larger categories. Besides outlining the technical features and advantages of the method, we describe a wide range of results arising from the analysis of the obtained rankings and we benchmark these observations against those established with other economical parameters. These comparisons allow to partition countries and products into various main typologies, with well-revealed characterizing features. Our methods have wide applicability to general problems of ranking in bipartite networks.

Automated summary

The study demonstrates the use of the Shannon entropy function in measuring the economic efficiency of countries and the specialization of products, allowing for the decomposition of competitivity measures into inter-sectorial and intra-sectorial contributions. Results from the analysis of rankings are compared with other economic parameters to categorize countries and products into different typologies. The method has broad applicability for ranking problems in bipartite networks.