Essays on the Use of Big Data in Development Economics

In this thesis I approach problems within the literature of Development Economics.Using tools from policy evaluation, different quantitative methodsand big data sources, I study the common problems that affect the developmentof the nations. I separate my thesis into three chapters. In Chapter1, using policy evaluation techniques together with other quantitativemethods, I study the effects of the policy integration for the academic sectorwithin the European Union. In the second chapter, I study one of themost important subjects presented in this thesis: inequality. Using the caseof Colombian municipalities, I examine how international trade affects socialconditions measured by the Multidimensional Poverty Index. Finally, in thethird chapter, I study the effect of the patent innovation using the complexityalgorithm developed by Hidalgo and Haussmann. Here I do a comparativeof the patent innovation using two aggregations: countries and cities. Next,I will explain in more detail the findings of each chapter.Chapter 1: It is generally accepted that the frequency of cross-border collaborationshas been increasing in recent decades, which is principally regardedas a symptom of globalization. While this is true on average, we uncover amore nuanced story by analyzing publications, and by disaggregating theseR&D outputs by country, across 14 well-defined research subject areas. Inthis way, we are able to interpret trends in cross-border activities accordingto more domain-specific trends. We focus our analysis on the impact of entryinto the EU by new member states by quantifying the rate of cross-border collaborationbefore and after the 2004 enlargement of the European Union. Inthis sense, we build upon recent studies aimed at quantifying the impact ofEuropean Research Area integration policies on the activity of the Europeaninnovation system. We combine descriptive complex networks techniqueswith panel regression (Difference in Difference) methods to reveal, counterintuitively,a decrease in cross-border activity by the new EU member statesfollowing their entrance. The results show that while the number of crossbordercollaborations in academia is increasing in the old member countries,and despite that the number of cross-border publications in the new membersis higher compared with past years, they would actually collaboratemore being outside the European Union. We use data for the inventor mobilitynetwork to show that these counterintuitive trends are none other thanthe negative externalities of unification associated with brain-drain. Chapter2: We empirically measure the effects of international trade on inequality.By studying the Colombian case, we found that the municipalities with exporterfirms have an 11% greater probability for increasing their inequalitythrough social deprivations compared to municipalities, where any of thefirms are exporters. Furthermore, we aggregate firms’ exports at the municipalitylevel by using the minimum economical unit affected by the incomingwealth from foreign markets, considering spatial relations to account for direct,indirect and total effects. We define social inequality as the average shortfall of social conditions by municipality. Specifically we use the ColombianMultidimensional Poverty Index. As a result, we found empirical evidencefor a strong neighborhood effect, which helps make the decision thatwould be used to improve social conditions in those municipalities withoutexporter firms. Chapter 3: One of the most important questions in DevelopmentalEconomics is how technological innovation is able to shift development.Here, we use the Hidalgo and Hausmann complexity algorithmto estimate how the selection of the innovation field affects the leadershipin innovation among countries by using the first patent of triadic familiesof the European, Japanese and United States patent office. In this analysiswe rank countries, regions and patents using the Economic ComplexityIndex (ECI) and Product Complexity Index (PCI). Our findings highlightthe United States as a leading country in patent innovation during most ofthe years. In contrast, using the region aggregation level, we find that theJapanese regions are the leaders in patent innovation during every year inour data. However, the most complex regions in the Unites States. On thepatent side, we note that the fields related to chemistry, biotechnology andpharmaceuticals play a very important role in patent innovation. Finally,we compare our findings with similar works of other researchers, finding astrong relationship between academic research and patent innovation.In this thesis, I explore quantitative methods and Data Science techniques appliedto social studies for different aggregations. In the first chapter, I accountfor the collaboration in R&D between groups of countries. In the secondchapter, I explore how one single country and its municipalities relate to theworld through trade, and how its relationship could modify the condition,while its minimal political level affects the social conditions through a mechanismaccepted and studied by classical economics. In Chapter 3, we studythe behavior of nations, where every nation with innovative production is included.By alternating the level of aggregations from a nation to a city, we areable to determine the role that political regions play within the whole country.Recognizing the importance of the results and the methods that I use toexplore these important development issues, such as international integration,inequality, international trade, innovation and relation country-cities,this thesis questions the classical economical methods and the relevance inaccepting new methodologies based on Data Science to answer the questionof classical problems that were answered by using theoretical methods inthe past. These new methodologies based on Big Data are evolving everyday with importance, and, moreover, with information collected by governments,social networks, international organizations and private institutions.Therefore, the methods exposed in this dissertation play a fundamental rolein the reshaping of economics and the study and interpretation of the relationbetween governments, societies and citizens.