I would have expected the structure of small isolated economies to resemble the nearest largest economy, but Oceania (dominated by Australia) and the Caribbean do not. Instead, they resemble the largest economic group that shares their cultural background regardless of distance.
In the Caribbean, the largest island economies are primarily Spanish speaking and as a group their structure closely resembles Spanish speaking Latin America. This situation is not completely clear, but complicated by two major twists. The economic structure of English speaking Jamaica also matches the Latin American structure, so resemblance based on cultural background does not always hold. In Puerto Rico’s case, its full economic integration with the US renders it irrelevant to this issue.
Fully one half of Australia’s bilateral trade is with OECD countries, which seems strange given that the OECD group is the geographically most distant
(this trade data is from Australia Department of Foreign Affairs and Trade http://www.dfat.gov.au/publications/tgs/index.html ).
Source: derived from UN online SNA database (System of National Accounts)
I am defining industrial structure as the proportion of GDP contributed by the main 3 types of industry: agriculture, manufacturing and services. In the graph, I have shown industrial structure as represented by the share of agriculture alone. This is because agriculture is much better correlated with GDP per capita than the other sectors, and so allows a simple graphical representation.
Using agriculture also seems intuitively valid because, as the oldest human industry, the less reliant on it an economy is, the further its economy has developed.
For more information on Gravity Theory as it relates to culture and history, see an excellent paper by Douglas Campbell (UC Davis), www.econ.ucdavis./campbell.pdf
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