Global linkages and local institutions: the role of imports and MNEs in the regional diversification into complex products in China

This paper explores the role of product portfolios of domestic imports and foreign firms in the regional diversification of domestic firms to new exports. We find that regional diversification is favoured by product relatedness to the product portfolios of both imports and foreign firms. The positive effects from imports increase when diversifying to more complex products, while the effects from foreign firms remain relatively unchanged. Local embeddedness facilitates spillovers from foreign firms. Finally, local embeddedness amplifies the positive effects from both imports and foreign presence, particularly when diversifying into the most complex products.</p

Decreased virtual water outflows from the Yellow River basin are increasingly critical to China

Water scarcity is an emerging threat to food security and socio-economic prosperity, and it is crucial to assess crop production response to water scarcity in large river basins. The water footprint, which considers water use in supply chains, provides a powerful tool for assessing the contributions of water resources within a certain region by tracking the volume and structure of virtual water flows. In this study of the structure of the water footprint network from a complexity perspective, we reassessed the significance of water resources for crop services in a large river basin with a severe water shortage - the Yellow River basin (YRB) of China. The temporal increase of the complexity index indicated that the virtual water outflows (VWFs) from the YRB were becoming increasingly critical to China; i.e. the ability of YRB to produce crops boosted the difficulty of its water being replaced by water exporting from other basins. Decomposition of complexity suggested that during the 1980s to 2000s, the temporally increased complexity was due mainly to the lack of competitors and the increasing uniqueness of crops supporting VWFs. This complexity deeply embedded the YRB into the footprints of a water network that facilitated further development with constrained water resources. Still, it also reinforced reliance from other regions on YRB's scarce water. Based on this analysis, we suggest that resource regulation should be carried out appropriately to ensure ecological sustainability and high-quality development of river basins.</p