IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/124311.html
   My bibliography  Save this paper

Premature deindustrialization, global value chains, and Dutch disease in Asian latecomer economies

Author

Listed:
  • Taguchi, Hiroyuki
  • Lar, Ni

Abstract

This study examines premature deindustrialization in Asian latecomer developing economies and its affecting factors from the perspectives of participation in global value chains (GVC) and the Dutch Disease. We first show the degree of deindustrialization according to country-specific fixed effects in estimating the manufacturing-population-income relationships. Second, we reveal the contributions of GVC participation and the Dutch Disease effects to the country-specific fixed effect by replacing the fixed effect with these factors in the estimation. The econometric empirical estimations yielded several findings. First, the fixed-effect model estimation results suggested the existence of deindustrialization and its risk in all Asian latecomer economies, with China, Japan, and Korea as benchmark cases. Second, the factor analyses revealed that the lack of GVC participation in Asian latecomer economies contributes to their country-specific deindustrialization by around 40% on average; and as for the Dutch Disease effects, its contributions to deindustrialization is around 10% on average, although the resource-rich developing economies have relatively larger contributions to their deindustrialization.

Suggested Citation

  • Taguchi, Hiroyuki & Lar, Ni, 2025. "Premature deindustrialization, global value chains, and Dutch disease in Asian latecomer economies," MPRA Paper 124311, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:124311
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/124311/1/MPRA_paper_124311.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    2. Arnaud Daymard, 2020. "Agricultural Productivity as a Prerequisite of Industrialization: Some New Evidence on Trade Openness and Premature Deindustrialization," THEMA Working Papers 2020-07, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    3. Fukunari KIMURA, 2006. "International Production and Distribution Networks in East Asia: Eighteen Facts, Mechanics, and Policy Implications," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(2), pages 326-344, December.
    4. Hiroyuki Taguchi & Yuta Tsukada, 2022. "Premature Deindustrialization Risk in Asian Latecomer Developing Economies," Asian Economic Papers, MIT Press, vol. 21(2), pages 61-77, Summer.
    5. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    6. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    7. John Ssozi & Elise Howard, 2018. "The Non-Classical Structural Economic Transformation of Sub-Saharan Africa: Urbanization with Premature Deindustrialization," Africagrowth Agenda, Africagrowth Institute, vol. 15(1), pages 8-12.
    8. Torfinn Harding & Anthony J Venables, 2016. "The Implications of Natural Resource Exports for Nonresource Trade," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(2), pages 268-302, June.
    9. Bruno Casella & Richard Bolwijn & Daniel Moran & Keiichiro Kanemoto, . "Improving the analysis of global value chains: the UNCTAD-Eora Database," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    10. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    11. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    12. Esteban Pérez Caldentey & Matías Vernengo, 2021. "Financialization, premature deindustrialization, and instability in Latin America," Review of Keynesian Economics, Edward Elgar Publishing, vol. 9(4), pages 493–511-4, October.
    13. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    14. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Fitting the Gravity Model when Zero Trade Flows are Frequent: a Comparison of Estimation Techniques using Africa's Trade Data," GlobalFood Discussion Papers 230588, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    15. Robert Koopman & William Powers & Zhi Wang & Shang-Jin Wei, 2010. "Give Credit Where Credit Is Due: Tracing Value Added in Global Production Chains," NBER Working Papers 16426, National Bureau of Economic Research, Inc.
    16. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    17. Leonor Coutinho, 2011. "The Resource Curse and Fiscal Policy," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 5(1), pages 43-70, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Taguchi, Hiroyuki, 2023. "Premature deindustrialization: an empirical analysis in latecomer developing countries," MPRA Paper 118346, University Library of Munich, Germany.
    2. Hiroyuki Taguchi & Javkhlan Ganbayar, 2022. "Natural Resource Funds: Their Objectives and Effectiveness," Sustainability, MDPI, vol. 14(17), pages 1-20, September.
    3. Hiroyuki Taguchi & Jun Zhao, 2022. "China's global value chain linkage and logistics performances in emerging ASEAN economies," International Studies of Economics, John Wiley & Sons, vol. 17(2), pages 126-155, July.
    4. Elbek, Abdullaev & Taguchi, Hiroyuki, 2022. "Global value chains’ participation and logistics performance: the case of post-Soviet economies," MPRA Paper 115443, University Library of Munich, Germany.
    5. Maria Savona, 2021. "Revisiting High Development Theory to Explain Upgrading Prospects in Business Services Global Value Chains," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(2), pages 206-226, April.
    6. Abdullaev Elbek Erkin Ugli, 2023. "Global Value Chains’ Participation and Logistics Performance in Post-Soviet Economies," Bulletin of Applied Economics, Risk Market Journals, vol. 10(1), pages 81-101.
    7. Taguchi, Hiroyuki & Ganbayar, Javkhlan, 2022. "An econometric study on the classification and effectiveness of natural resource funds," MPRA Paper 114392, University Library of Munich, Germany.
    8. Lar, Ni & Taguchi, Hiroyuki, 2023. "Premature deindustrialization or reindustrialization: The case of China’s latecomer provinces," MPRA Paper 118423, University Library of Munich, Germany.
    9. Ozcan, Burcu & Temiz, Mehmet & Gültekin Tarla, Esma, 2023. "The resource curse phenomenon in the case of precious metals: A panel evidence from top 19 exporting countries," Resources Policy, Elsevier, vol. 81(C).
    10. Taguchi, Hiroyuki & Elbek, Abdullaev, 2022. "Premature deindustrialization in post-Soviet economies," MPRA Paper 114413, University Library of Munich, Germany.
    11. Njangang, Henri & Asongu, Simplice A. & Tadadjeu, Sosson & Nounamo, Yann & Kamguia, Brice, 2022. "Governance in mitigating the effect of oil wealth on wealth inequality: A cross-country analysis of policy thresholds," Resources Policy, Elsevier, vol. 76(C).
    12. José Fuinhas & António Marques & Alcino Couto, 2015. "Oil rents and economic growth in oil producing countries: evidence from a macro panel," Economic Change and Restructuring, Springer, vol. 48(3), pages 257-279, November.
    13. Erdoğan, Seyfettin & Yıldırım, Durmuş Çağrı & Gedikli, Ayfer, 2020. "Natural resource abundance, financial development and economic growth: An investigation on Next-11 countries," Resources Policy, Elsevier, vol. 65(C).
    14. Benedikt Goderis & Samuel W. Malone, 2011. "Natural Resource Booms and Inequality: Theory and Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 388-417, June.
    15. Carrington, Sarah J. & Herrero Olarte, Susana & Urbina, Gabriel, 2023. "Commodity cycle management in Latin America: The importance of resilience in face of vulnerability," Resources Policy, Elsevier, vol. 81(C).
    16. Filippo Bontadini & Maria Savona, 2019. "Revisiting the Natural Resource ‘Curse’ in the Context of Trade in Value Added: Enclave or High-development Backward Linkages?," SPRU Working Paper Series 2019-15, SPRU - Science Policy Research Unit, University of Sussex Business School.
    17. Joseph David, 2024. "The role of corruption in the oil price–growth relationship: Insights from oil-rich economies," Economic Change and Restructuring, Springer, vol. 57(6), pages 1-32, December.
    18. Taguchi, Hiroyuki, 2022. "Premature Deindustrialization Risk: The Case of Thailand," MPRA Paper 113560, University Library of Munich, Germany.
    19. Zeeshan Arshad & Margarita Robaina & Anabela Botelho, 2020. "Renewable and Non-renewable Energy, Economic Growth and Natural Resources Impact on Environmental Quality: Empirical Evidence from South and Southeast Asian Countries with CS-ARDL Modeling," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 368-383.
    20. Nouf Alsharif & Sambit Bhattacharyya, 2024. "Oil discovery, boom‐bust cycle and manufacturing slowdown: Evidence from a large industry level dataset," Review of Development Economics, Wiley Blackwell, vol. 28(2), pages 406-431, May.

    More about this item

    Keywords

    Premature deindustrialization; Global value chains; Dutch Disease; Asian latecomer economies; Fixed effect model;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:124311. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.