Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298525 
Year of Publication: 
2023
Series/Report no.: 
Document de travail No. 2023-03
Publisher: 
Université du Québec à Montréal, École des sciences de la gestion (ESG UQAM), Département des sciences économiques, Montréal
Abstract: 
Rodrik (2016) pointed out that late industrializing countries are experiencing a lower peak at lower income levels in the manufacturing employment share hump-shaped path. The present study develops a theoretical model to analyze the dynamics of industrialization and deindustrialization in developing countries and their integration with earlier industrialized economies. The findings suggest that financial development plays a crucial role in both accelerating industrialization and facilitating deindustrialization. Moreover, the model reveals that when developing countries integrate with economies in deindustrialization, the technological frontier in the manufacturing sector becomes relatively further ahead compared to the services sector. This discrepancy in technological proximity between sectors influences the differential productivity growth rates in manufacturing and services, driving an early shift towards the services sector. The model is calibrated to South African data from 1960 to 2010 and provides empirical support for these findings.
Subjects: 
Structural Change
Sectoral Productivity Growth
Financial Development
Technology Adoption
JEL: 
E23
O11
O14
O31
O33
O40
O41
G28
Document Type: 
Working Paper

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