Industrialisation as an engine of growth in developing countries
Adam Szirmai
#2009-010
This paper examines the emergence of manufacturing in developing
countries in the period 1950-2005. It presents new data on structural
change in a sample of 63 developing countries and 16 advanced economies.
Industrialisation is seen as a single global process of structural
change, in which separate countries follow different paths depending on
their initial conditions and moment of their entry into the industrial
race. With a few important exceptions such as Mexico, Brazil, India and
China, developing countries embarked on industrialisation after 1945.
The paper argues that successful catch up in developing countries is
associated with industrialisation. It examines the theoretical and
empirical for the thesis that industrialisation acts as an engine of
growth and attempts to quantify different aspects of this debate. The
statistical evidence is not straightforward. Manufacturing has been
important for growth in developing countries, but not all expectations
of the engine of growth hypothesis are borne out by the data. The more
general historical evidence provides more support for the
industrialisation thesis.
Keywords: Structural Change, Manufacturing, Engine of Growth, Catch Up
JEL CODES: O14, Industrialisation, Manufacturing and Service Industries;
N6, Manufacturing and Construction
UNU-MERIT Working Papers
ISSN 1871-9872