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Input chains and industrialization

A key aspect of industrialization is the adoption of increasing-returns-to-scale, industrial, technologies. Two other, well-documented aspects are that industrial technologies are adopted throughout intermediate-input chains and that they use intermediate inputs intensively relative to the technologies they replace. These features of industrial technologies combined imply that countries with access to similar technologies may have very different levels of industrialization and income, even if the degree of increasing returns to scale at the firm level is relatively small. Furthermore, a small improvement in the productivity of industrial technologies can trigger full-scale industrialization and a large increase in income.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 498.

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Date of creation: Nov 2000
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Handle: RePEc:upf:upfgen:498
Contact details of provider: Web page: http://www.econ.upf.edu/

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  1. Rodriguez-Clare, Andres, 1996. "The division of labor and economic development," Journal of Development Economics, Elsevier, vol. 49(1), pages 3-32, April.
  2. Susanto Basu, 1994. "Intermediate Goods and Business Cycles: Implications for Productivity and Welfare," NBER Working Papers 4817, National Bureau of Economic Research, Inc.
  3. Venables, Anthony J, 1995. "Economic Integration and the Location of Firms," American Economic Review, American Economic Association, vol. 85(2), pages 296-300, May.
  4. Puga, Diego & Venables, Anthony J, 1996. "The Spread of Industry: Spatial Agglomeration in Economic Development," CEPR Discussion Papers 1354, C.E.P.R. Discussion Papers.
  5. Kiminori Matsuyama, 1995. "Complementarities and Cumulative Processes in Models of Monopolistic Competition," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 701-729, June.
  6. Venables, Anthony J., 1996. "Trade policy, cumulative causation, and industrial development," Journal of Development Economics, Elsevier, vol. 49(1), pages 179-197, April.
  7. Murphy, Kevin M. & Shleifer, Andrei & Vishny, Robert W., 1989. "Industrialization and the Big Push," Scholarly Articles 3606235, Harvard University Department of Economics.
  8. Gans, J.S., 1995. "Fixed Cost Assumptions," Papers 95/47, New South Wales - School of Economics.
  9. Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62, pages 143.
  10. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  11. Fafchamps, Marcel & Helms, Brigit, 1996. "Local demand, investment multipliers, and industrialization: Theory and application to the Guatemalan highlands," Journal of Development Economics, Elsevier, vol. 49(1), pages 61-92, April.
  12. Gans, Joshua S., 1998. "Time Lags and Indicative Planning in a Dynamic Model of Industrialization," Journal of the Japanese and International Economies, Elsevier, vol. 12(2), pages 103-130, June.
  13. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057 Elsevier.
  14. Gans, J.S., 1995. "Industrialisation with a Menu of Technology: Appropriate Technologies and the "Big Push"," Papers 95/36, New South Wales - School of Economics.
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