Leading Dragons phenomenon : new opportunities for catch-up in low-income countries
Modern economic development is accompanied by the structural transformation from an agrarian to an industrial economy and occurs through a process of continuous industrial and technological upgrading. Since the 18th century, all countries that industrialized successfully in Europe, North America and East Asia followed their comparative advantage and leveraged the late-comer advantage to emulate the leader-follower flying geese pattern of industrial upgrading. The large dynamic emerging market countries such as China, India and Brazil are also engaged in industrial upgrading but with a critical difference. In particular, because of its sheer size, China has absorbed nearly all labor-intensive jobs and become the world’s largest exporter of labor-intensive products. The current view is that China’s dominance hinders poor countries from developing similar industries. The authors argue that industrial upgrading has increased wages and is causing China to graduate from labor-intensive to more capital- and technology-intensive industries. These industries will shed labor and create a huge opportunity for lower wage countries to start a phase of labor-intensive industrialization. This process, called the Leading Dragon Phenomenon, offers an unprecedented opportunity to low-income Sub-Saharan Africa where the industrial sector is underdeveloped and investment capital and entrepreneurial skills are leading constraints to manufacturing. It can seize the opportunity and resolve the constraints by attracting some of the OFDI flowing currently from China, India and Brazil into the manufacturing sectors of other developing countries. All low-income countries will compete but to catch the jobs spillover from China, the winner must implement credible economic development strategies that are consistent with its comparative advantage.
|Date of creation:||01 Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2009.
"Endowment structures, industrial dynamics, and economic growth,"
Policy Research Working Paper Series
5055, The World Bank.
- Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2015. "Endowment structures, industrial dynamics, and economic growth," Journal of Monetary Economics, Elsevier, vol. 76(C), pages 244-263.
- Yong Wang & Justin Yifu Lin & Jiandong Ju, 2010. "Endowment Structure, Industrial Dynamics, and Economic Growth," 2010 Meeting Papers 679, Society for Economic Dynamics.
- Steven J. Davis & R. Jason Faberman & John Haltiwanger, 2006.
"The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links,"
NBER Working Papers
12167, National Bureau of Economic Research, Inc.
- Steven J. Davis & R. Jason Faberman & John Haltiwanger, 2006. "The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 3-26, Summer.
- Robert J. Barro & Jong-Wha Lee, 2000.
"International Data on Educational Attainment Updates and Implications,"
NBER Working Papers
7911, National Bureau of Economic Research, Inc.
- Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
- Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
- Robert E. Lipsey & Eric D. Ramstetter & Magnus Blomstrom, 2000. "Outward FDI and Parent Exports and Employment: Japan, the United States, and Sweden," NBER Working Papers 7623, National Bureau of Economic Research, Inc.
- Joshi, Vijay & Little, I. M. D, 1996. "India's Economic Reforms, 1991-2001," OUP Catalogue, Oxford University Press, number 9780198290780, December.
- McMillan, Margaret & Rodrik, Dani, 2012.
"Globalization, structural change, and productivity growth:,"
IFPRI discussion papers
1160, International Food Policy Research Institute (IFPRI).
- Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
- Indermit Gill & Homi Kharas, 2007. "An East Asian Renaissance : Ideas for Economic Growth," World Bank Publications, The World Bank, number 6798.
- World Bank, 2011. "Global Development Horizons 2011 : Multipolarity - The New Global Economy," World Bank Publications, The World Bank, number 2313.
- Anne O. Krueger, 1983. "Trade and Employment in Developing Countries, Volume 3: Synthesis and Conclusions," NBER Books, National Bureau of Economic Research, Inc, number krue83-1, September.
- Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- Whalley John & Weisbrod Aaron, 2012.
"The Contribution of Chinese FDI to Africa's Pre Crisis Growth Surge,"
Global Economy Journal,
De Gruyter, vol. 12(4), pages 1-28, December.
- Aaron Weisbrod & John Whalley, 2011. "The Contribution of Chinese FDI to Africa's Pre Crisis Growth Surge," NBER Working Papers 17544, National Bureau of Economic Research, Inc.
- Helleiner, Gerald K, 1973. "Manufactured Exports from Less-Developed Countries and Multinational Firms," Economic Journal, Royal Economic Society, vol. 83(329), pages 21-47, March.
- Harrison, Ann & Rodríguez-Clare, Andrés, 2010.
"Trade, Foreign Investment, and Industrial Policy for Developing Countries,"
Handbook of Development Economics,
- Ann Harrison & Andrés Rodríguez-Clare, 2009. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," NBER Working Papers 15261, National Bureau of Economic Research, Inc.
- Allen J. Scott, 2009. "World Development Report 2009: reshaping economic geography," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 583-586, July.
- Huang Yiping & Jiang Tingsong, 2010. "What Does the Lewis Turning Point Mean for China? A Computable General Equilibrium Analysis," Macroeconomics Working Papers 22718, East Asian Bureau of Economic Research.
- Justin Lin & Ha-Joon Chang, 2009. "Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy it? A Debate Between Justin Lin and Ha-Joon Chang," Development Policy Review, Overseas Development Institute, vol. 27(5), pages 483-502, 09.
- Robert Koopman & Zhi Wang & Shang-Jin Wei, 2008. "How Much of Chinese Exports is Really Made In China? Assessing Domestic Value-Added When Processing Trade is Pervasive," NBER Working Papers 14109, National Bureau of Economic Research, Inc.
- Thomas Farole, 2011. "Special Economic Zones in Africa : Comparing Performance and Learning from Global Experience," World Bank Publications, The World Bank, number 2268.
- Justin Yifu Lin, 2012. "The Quest for Prosperity: How Developing Economies Can Take Off," Economics Books, Princeton University Press, edition 1, number 9812, 01-2013.
- Kojima, Kiyoshi, 2000. "The "flying geese" model of Asian economic development: origin, theoretical extensions, and regional policy implications," Journal of Asian Economics, Elsevier, vol. 11(4), pages 375-401.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6000. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.