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The middle-income trap from the viewpoint of trade structures

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  • Kumagai, Satoru

Abstract

In this study, we try to elucidate the middle-income trap from the viewpoint of international trade. We conduct regression analyses on the relationship between income level and net export ratios for different types of goods for trapped and non-trapped samples separately. Our findings indicate that industrial upgrading appears to occur exactly as depicted by the flying-geese model for non-trapped countries while trapped countries tend to depend on the export of primary commodities, and industrialization appears to be driven by forward linkages to processed goods and a narrow base. The results of our analyses suggest that the middle-income trap is a form of Dutch disease or a 'resource curse' in the middle-income stage.

Suggested Citation

  • Kumagai, Satoru, 2014. "The middle-income trap from the viewpoint of trade structures," IDE Discussion Papers 482, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  • Handle: RePEc:jet:dpaper:dpaper482
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    References listed on IDEAS

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    1. Anna Jankowska & Arne Nagengast & José Ramón Perea, 2012. "The Middle-Income Trap: Comparing Asian and Latin American Experiences," OECD Development Centre Policy Insights 96, OECD Publishing.
    2. Harinder S. Kohli & Ashok Sharma & Anil Sood, 2011. "Realizing the Asian Century: A Strategic Framework," Book Chapters,in: Harinder Kohli & Ashok Sharma & Anil Sood (ed.), Asia 2050: Realizing the Asian Century, chapter 6, pages 63-70 Emerging Markets Forum.
    3. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    4. Harinder S. Kohli, 2011. "Realizing the Asian Century: Asia's Role in the World," Book Chapters,in: Harinder Kohli & Ashok Sharma & Anil Sood (ed.), Asia 2050: Realizing the Asian Century, chapter 15, pages 275-281 Emerging Markets Forum.
    5. Harinder Kohli & Ashok Sharma & Anil Sood & Haruhiko Kuroda, 2011. "Asia 2050: Realizing the Asian Century: Overview," Other Working Papers asia2050overview, Emerging Markets Forum.
    6. Indermit Gill & Homi Kharas, 2007. "An East Asian Renaissance : Ideas for Economic Growth," World Bank Publications, The World Bank, number 6798, July.
    7. Flaaen, Aaron & Ghani, Ejaz & Mishra, Saurabh, 2013. "How to avoid middle income traps ? evidence from Malaysia," Policy Research Working Paper Series 6427, The World Bank.
    8. Felipe, Jesus, 2012. "Tracking the Middle-Income Trap: What is It, Who is in It, and Why? Part 2," ADB Economics Working Paper Series 307, Asian Development Bank.
    9. Anna Jankowska & Arne Nagengast & José Ramón Perea, 2012. "The Product Space and the Middle-Income Trap: Comparing Asian and Latin American Experiences," OECD Development Centre Working Papers 311, OECD Publishing.
    10. Felipe, Jesus, 2012. "Tracking the Middle-Income Trap: What is It, Who is in It, and Why? Part 1," ADB Economics Working Paper Series 306, Asian Development Bank.
    11. Shahid Yusuf & Kaoru Nabeshima, 2009. "Tiger Economies Under Threat : A Comparative Analysis of Malaysia's Industrial Prospects and Policy Options," World Bank Publications, The World Bank, number 2680, July.
    12. Jesus Felipe & Arnelyn Abdon & Utsav Kumar, 2012. "Tracking the Middle-income Trap: What Is It, Who Is in It, and Why?," Economics Working Paper Archive wp_715, Levy Economics Institute.
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    More about this item

    Keywords

    Myanmar; International trade; Economic development; Middle-income trap; Malaysia; Trade structure; Flying geese;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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