Risk of premature deindustrialization: the case of the latecomer’s developing countries in Asia

This paper aims to examine the risk of premature deindustrialization in the latecomer’s developing countries in Asia with a focus on manufacturing output ratio by using the latecomer’s index. This study’s contributions are to target Asian economies that were treated as a group with comparative advantages in manufacturing by previous studies, and to adopt the latecomer’s index to show downward shifts of the latecomer’s manufacturing-income relationship that implies the existence of premature deindustrialization risk. The empirical analysis identified the downward shifts of manufacturing-income relationship in globalization processes, i.e., premature deindustrialization risk in the latecomer’s developing countries in Asia, and also showed that the risk was higher in the manufacturing trade-deficit countries than the trade-surplus ones, and in South Asian countries than in Southeast countries. The strategic policy direction in the latecomers who have faced premature deindustrialization risk is to facilitate their participations in global value chains to mitigate and avoid the risk.