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Manufacturing and Economic Development

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  • Szirmai, Adam

Abstract

This paper examines the theoretical and empirical evidence for the hypothesis that manufacturing is the main engine of growth in developing countries. The paper opens with an overview of the main arguments supporting the engine of growth hypothesis and then examines each of these arguments using a mix of statistical analysis of secondary data and secondary literature. The paper concludes that manufacturing will continue to be important in accelerating growth and achieving catch-up in developing countries. However, compared to the past 60 years, market service sectors will become relatively more important as potential sources of growth and catch up.

Suggested Citation

  • Szirmai, Adam, 2011. "Manufacturing and Economic Development," WIDER Working Paper Series 075, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2011-75
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    File URL: http://www.wider.unu.edu/sites/default/files/wp2011-075.pdf
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    References listed on IDEAS

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    1. Larson, David F. & Butzer, Rita & Mundlak, Yair & Crego, Al, 2000. "A Cross-Country Database for Sector Investment and Capital," World Bank Economic Review, World Bank Group, vol. 14(2), pages 371-391, May.
    2. Szirmai, Adam & Verspagen, Bart, 2015. "Manufacturing and economic growth in developing countries, 1950–2005," Structural Change and Economic Dynamics, Elsevier, vol. 34(C), pages 46-59.
    3. Jonathan Temple & Ludger Wößmann, 2006. "Dualism and cross-country growth regressions," Journal of Economic Growth, Springer, vol. 11(3), pages 187-228, September.
    4. Szirmai,Adam, 2005. "The Dynamics of Socio-Economic Development," Cambridge Books, Cambridge University Press, number 9780521520843, November.
    5. Timmer, Marcel P. & Szirmai, Adam, 2000. "Productivity growth in Asian manufacturing: the structural bonus hypothesis examined," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 371-392, December.
    6. B. Bosworth & S. M. Collins & Y. Chen, "undated". "Accounting for Difference in Economic Growth," Discussion Papers 115, Brookings Institution International Economics.
    7. Jan Fagerberg & Bart Verspagen, 2007. "Innovation, growth and economic development: have the conditions for catch-up changed?," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 1(1), pages 13-33.
    8. Rodrik, Dani, 2009. "Growth After the Crisis," CEPR Discussion Papers 7480, C.E.P.R. Discussion Papers.
    9. Fagerberg, Jan & Verspagen, Bart, 2002. "Technology-gaps, innovation-diffusion and transformation: an evolutionary interpretation," Research Policy, Elsevier, vol. 31(8-9), pages 1291-1304, December.
    10. Marcel P. Timmer & Gaaitzen J. de Vries, 2009. "Structural change and growth accelerations in Asia and Latin America: a new sectoral data set," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(2), pages 165-190, June.
    11. Jochen Hartwig, 2011. "Testing The Baumol–Nordhaus Model With Eu Klems Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(3), pages 471-489, September.
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    Cited by:

    1. Maciej Grodzicki, 2013. "Productivity Convergence in Manufacturing in the European Union: The Role of Economic Structure," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 5(2).

    More about this item

    Keywords

    structural change; manufacturing; engine of growth; catch-up;

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