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The Speed of Structural Convergence in the Manufacturing Industries of Newly Industrializing Economies

  • Berhanu Abegaz

    ()

    (Department of Economics, College of William and Mary)

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    We seek to identify the determinants of the speed of convergence in the structures of manufacturing to their steady-state levels as developing economies become fully industrialized. Applying a two-stage sequential estimation procedure to data on three-digit manufacturing industries for 45 mostly middle-income countries, we find empirical support for the hypothesis that production efficiency is a major determinant of inter-branch output share adjustment. This finding applies to many but not all industries. One implication for latecomers is that industrial policy must aim at rapid diffusion of core technologies to facilitate the acquisition of industrial capabilities in a diversified basket of exportables.

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    File URL: http://economics.wm.edu/wp/cwm_wp67.pdf
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    Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 67.

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    Length: 29 pages
    Date of creation: 07 Dec 2007
    Date of revision:
    Handle: RePEc:cwm:wpaper:67
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    Web page: http://www.wm.edu/economics/

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    16. Evenson, Robert E. & Westphal, Larry E., 1995. "Technological change and technology strategy," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 37, pages 2209-2299 Elsevier.
    17. Hausmann, Ricardo & Klinger, Bailey, 2006. "South Africa's Export Predicament," Working Paper Series rwp06-040, Harvard University, John F. Kennedy School of Government.
    18. B. Abegaz, 2002. "Structural Convergence in Manufacturing Industries between Leaders and Latecomers," Journal of Development Studies, Taylor & Francis Journals, vol. 38(4), pages 69-99.
    19. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
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