Optimizing the Export Diversification Strategy of Iran's Chemical Products Using Product Spaces and Economic Complexity Theories

Achieving sustainable development in the future requires investing in productive capabilities that lead to export diversification. Given the importance of the chemical industry as a strategic industry around the world, especially in Iran, and its effect on upstream and downstream industries, determining the optimal export diversification strategy in this sector is critical. In this regard, the theory of economic complexity will be used as a basis for identifying high-potential opportunities for export diversity and the theory of product space will be applied which is a powerful tool for identifying strategies. Using export data of chemical products (2014-2018) in 128 countries, we drew product space for Iran. Based on revealed comparative advantages of more than one, results for Iran show that out of 921 six-digit chemical products of the harmonized system, 295 product codes has potential to be activated. Subsequently, by adding two new constraints to the model, potentially activate products were reduced to 145 products. Next, by implementing five strategies: random, greedy, high degree, low degree and majority on Iran's chemical products network, an integration of greedy and majority strategies has been shown to minimize network activation time. Finally, by merging these two strategies, the optimal strategy was identified, and 145 products were prioritized in order to improve export diversity.