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Industrial Development, Technological Change, and Long-RunGrowth

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  • Peretto, Pietro F.

Abstract

To account for the qualitative differences between developed and developing countries, this paper argues that the expensive in-house R&D that manufacturing firms undertake in advanced industrial economies cannot be supported in countries that are in the early stage of industrialization and do not have sufficiently large markets for manufacturing goods. Such economies grow as standard development models predict: by accumulating physical and human capital and increasing specialization by industry. Only at sufficiently high levels of development are there incentives for systematic R&D efforts. As a result, economies go through an industrial life cycle as they move from initial backwardness to industrial maturity. In other words, development and growth are stages of a process of structural transformation characterized by changing patterns of capital accumulation, specialization by industry, and techological change.

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Bibliographic Info

Paper provided by Duke University, Department of Economics in its series Working Papers with number 97-10.

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Date of creation: 1997
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Publication status: Published in JOURNAL OF DEVELOPMENT ECONOMICS, Vol. 59, 1999, pages 389-417
Handle: RePEc:duk:dukeec:97-10

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Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
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Web page: http://econ.duke.edu/

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References

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