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• A system of indicators has been established for the high-quality economic development index developed by the Chinese government. • High-quality economic development is divided into five dimensions. • Reliance on the resource industry has significantly reduced the level of high-quality economic development. • The theoretical mechanisms of the impact of resource industry dependence on high-quality development are analyzed. • Government governance capacity weakens the impact of resource industry dependence on high-quality economic development. In resource-dependent regions, the meaning of high-quality economic development has yet to be clarified by published research, despite substantial scholarly interest in the topic. With the help of the economic development index developed by the Chinese government, this paper accurately measures high-quality economic development in 30 provinces in China and investigates how resource dependence and government governance capability affect regional high-quality economic development. Research has found that resource industry dependence has a significant inhibitory effect on high-quality economic development. Additionally, the analysis of the mechanisms revealed that resource industry dependence reduces high-quality economic development through a series of effects including crowding out innovation, weakening coordination, lagging green development, hindering global openness, and sharing in weakening. Further research has revealed that government governance capacity weakens the impact of resource industry dependence on high-quality economic development. A detailed analysis of three subsystem indicators of government governance capacity, namely policy planning, capability commitment, and performance assessment, indicates that they all have a weakening effect. To this end, the paper proposes policy recommendations, including increasing innovation inputs, advancing industrial restructuring, promoting green development, enhancing marketization levels, and constructing a diversified employment system. These measures aim to transform resource disadvantages into resource advantages and facilitate high-quality economic development. [ABSTRACT FROM AUTHOR]

• The consensus that manufacturing was the strategic road for development has recently been challenged. • We constructed an original and extensive database on the world manufacturing production, that provides information about value added and employment for 200 countries, of which 160 developing countries, for the 1970–2018 period. • The study does not reveal evidence of a recent decline of manufacturing in developing countries, including or not China. Rather we document a continuous expansion of manufacturing employment in the developing world, that accounts now for 82 % of the world employment, while the share of the developing economies in the world output has doubled over the period. • Since 2010, we observe and we quantify a new pattern. Manufacturing employment does not increase any more in China, while it has continued to grow at the same pace in the rest of the developing world. • Our findings show that manufacturing has continued to play a key role in economic development. Thus, low-income countries should not give up industrialization strategies and should learn from the recent experiences of rapid industrialization and growth. The "rise of the Rest" and almost all successes in economic development have relied on late industrialization. However, the consensus that manufacturing was the strategic road for development has recently been challenged. This paper addresses the issue of the status of manufacturing for economic development in the current period. To clarify whether the importance of manufacturing in developing countries has declined or not in the 21st Century, we constructed an original and extensive database on the world manufacturing production, that provides information about value added and employment for 200 countries, of which 160 Developing countries, for the 1970–2018 period. The study does not reveal evidence of a recent decline of manufacturing in developing countries, including or not China. Rather we document a continuous expansion of manufacturing employment in the developing world, that accounts now for 82 % of the world employment, while the share of the developing economies in the world output has doubled over the period. Since 2010, we observe and we quantify a new pattern. Manufacturing employment does not increase any more in China, while it has continued to grow at the same pace in the rest of the developing world. Our findings show that manufacturing has continued to play a key role in economic development. Thus, low-income countries should not give up industrialization strategies and should learn from the recent experiences of rapid industrialization and growth. In the near future, the upgrading of China's industrial structure will enlarge the windows of opportunities in manufacturing for late-comers. [ABSTRACT FROM AUTHOR]

• A productive restructuring model for the Greek economy is introduced. • The productive structure is optimized by using a particle swarm optimizer. • Policy intervention should focus on technologically advanced industrial sectors • The improvement of the economic structure cuts across all the economic system • Industrial structure adjustment has great potential to economic development policies The term productive restructuring refers to the transformation of an economic system for reaching predefined economic and social goals. The aim of this paper is to develop a methodological framework of productive restructuring, based on input-output analysis, targeting the optimization of the productive structure of an economy. The process of the productive restructuring involves: firstly, the reallocation of production among different economic sectors and, secondly, a process of intermediate input substitution. The proposed optimization model aims at the maximization of the total employment under macroeconomic constraints. A Particle Swarm Optimization algorithm is employed for the solution of the optimization problem. The proposed methodology is applied to the Greek economy. Results appear to show that the productive restructuring should focus on manufacturing sectors, mainly those of high and medium-high technological level. The findings of the research suggest that industrial structure adjustments have great potential for policy development. [ABSTRACT FROM AUTHOR]

• New panel dataset of Marxist variables for 43 countries from 2000 to 2014. • Dataset includes rates of surplus value, composition of capital, shares of productive activity, and profit rates for the global economy. • The paper tests Marx's hypotheses on economic development at the world level. • Marx was right at the global level: capital intensity rises faster than exploitation rate, and the global profit rate declines. • Productive capital relocated to China, and unproductive activity increased in developed countries. We assess Marx's hypotheses about capitalist development on a global scale by constructing a new dataset of Marxist variables (profit rates, exploitation rates, composition of capital, and shares of productive activity) for 43 major economies, derived from world input-output data and national accounts in the 2000–2014 period. Consistent with Marx's hypotheses, the average profit rate declines at the world level, between countries, and within countries. The global rate of exploitation increases until 2008 but stagnates after the financial crisis, while capital intensity continued to increase. At the cross-country level, rich countries became increasingly dominated by unproductive activity. China absorbed much of the world's productive activity and kept the labor share of value added roughly constant at the world level. [ABSTRACT FROM AUTHOR]

For a long period of the 20th Century, industrialization was seen as the quickest and more effective path for progress and productive diversification, influencing the choice of public policies adopted by Latin American governments since the inter-war period up until the debt crisis and the lost decade of the 1980s. Using a long-term macroeconomic database for the period 1913–2013 and 11 Latin American countries, complemented with a dataset of exports by product for the same countries and years, a positive relationship between industrialization and economic growth was found, both for the long run and for episodes of acceleration and deceleration. This correlation seems to be stronger for large than for small economies, reflecting the importance of the size of the domestic market in order to take advantages of economies of scale in the process of industrialization. Three economic channels that may explain this positive correlation are empirically tested. The first one is the contribution of manufacturing to the different components of productivity growth (within- and shift-effects), for which a shift-share decomposition was estimated, both for the long-run, for subperiods and for acceleration and deceleration episodes. The second channel is the contribution of industrialization to gross capital accumulation, where a positive relationship was found between the change in the share of employment in manufacture with the rate of growth of physical capital. Finally, the learning-by-doing hypothesis is tested using the skill-level composition of manufacturing exports, finding a positive relationship between cumulative manufacturing production and the share of mid- and high-skill products in the exports' matrix. The main contributions of the paper are twofold: the empirical identification of the mechanisms through which industrialization can promote economic development, and the extension of the analysis of Latin American economies to the first half of the 20th Century, which is scarce in the literature because of lack of reliable data. [ABSTRACT FROM AUTHOR]

• The paper documents developments in Indian economic performance and the role of structural change in this performance. • Manufacturing is dominated by informal labor, which has a deleterious effect on overall manufacturing performance. • Productivity growth is driven by within sector growth, with positive contributions of formal and informal activities to this. • Labor reallocation to the informal segment of the manufacturing sector is growth reducing in the Indian manufacturing sector. • A shift to more productive informal activities across sub-sectors exists, but this doesn't offset the negative within effect. This paper examines the role of structural change in India's performance, and in particular the role of the informal segment in the stagnant growth of the Indian manufacturing sector. Using counterfactual analysis – including a modified shift-share approach – the paper considers to what extent the informal sector can help explain the poor performance of Indian manufacturing over the period 1980-2011. The results suggest that the informal segment of manufacturing has been a drag on overall manufacturing productivity growth, with the informal manufacturing segment unable to provide a productivity bonus when absorbing workers from the agricultural sector. Results from the shift-share analysis indicate that labor reallocation to the informal segment of the manufacturing sector is growth-reducing, with structural change being the main source of this reduction, an effect which in turn is driven by movements of employment within manufacturing sub-sectors. [ABSTRACT FROM AUTHOR]

• Impacts of export quality on economic progress are examined. • The role of economic complexity for economic growth is investigated. • 28 OECD country's data is utilized from 1990 to 2019. • Export quality and economic complexity induce sustainable growth. • Institutional quality is a significant determinant for economic growth. It is important to unearth the role of structural change factors for sustainable growth in developed economies. Economic complexity, export product quality, and institutional indicators represent the overall structural change and transformation in an economy. This paper probed the influence of export product quality and economics of complexity on economic growth for 28 OECD (Organization for Economic Co-operation and Development) countries using the data from 1990 to 2019. In doing so, the study employs three-panel data econometric models to investigate the role of economic complexity, export quality, and institutional quality on economic development. The paper performs the empirical tests, including the cross-sectional related dependency methods and cointegration techniques. As per the results emerging from fully modified OLS (FMOLS) and dynamic OLS (DOLS) estimation, export quality and financial development positively and significantly strongly impact growth in the long run. The empirical conclusions report detailed discussion on sustainable growth and discuss novel implications concerning product quality and institutional performance. The conclusions stress the practical implications for sustainable economic growth of OECD economies. [ABSTRACT FROM AUTHOR]

• We present a methodology for relating traded products to aggregate country indicators. • We identify imported and exported products that correlate with growth and income per capita. • Catching-up economies characterized by frugality in consumer demand and the prominence of mass-production industries. • Mature economies distinguished by the importance of consumer demand and the export of knowledge-intensive goods. Using a novel methodology to relate traded products to aggregate country indicators, this paper identifies imported and exported goods that correlate with growth and income per capita, and based upon that, determines the productive and demand structure of mature and catching-up economies. The methodology in question first uses Principal Component Analysis on the products that countries specialize in importing and exporting, to reduce the number of variables that will, later, be linearly related to income and growth using Canonical Correlation Analysis. It is shown that fast growing or catching-up economies are characterized by the export of mass-produced manufactured goods, and the import of capital and intermediates – but not consumer goods. Frugality in consumption demand and congruence between exports and imports explain the high growth rates of catching-up or transitioning economies. In contrast, high income and slow growth mature economies are characterized by the export of goods whose production requires advanced technological capabilities. Their demand structure is characterized by the prominence of consumption rather than means of production. [ABSTRACT FROM AUTHOR]

• This paper investigates the relation between democracy and income per capita over the period 1870–2010. • I use both cross-sectional and panel fixed effects regressions to explore how this relation changed over time. • Results show that democracy positively affects income per capita in the period post-1950, especially after 1990. • Yet, democracy has no significant effect in the period prior to 1950. • In the years before World War II, income per capita is mostly explained by prior income levels and education. Economists and political scientists have long investigated the effect of political institutions on economic development, mainly focusing on cross-sectional analyses for the years after World War II. This paper takes a historical perspective and studies whether this effect can be traced back to 1870 and how it changed over time. Using both cross-sectional and panel fixed effects regressions, I show that democracy positively affects income per capita in the post-1950 period. The effect increases as time passes and becomes especially larger after 1990, i.e. with the great democratization wave induced by the Fall of the Iron Curtain. Yet, I find no effect for the period before 1950, when the variation in income per capita is mostly explained by prior income levels, and in particular, by education. These findings are robust to accounting for income dynamics as well as to using different data sources to measure political institutions. [ABSTRACT FROM AUTHOR]

• This paper studies structural change in export diversification patterns. • We use a Ricardian-based model of countries' relative export variety (REV). • REV is an outcome of changes in relative productivity and relative country size. • Model predictions are confirmed in a sample of 132 countries (1988–2014). • Productivity differences drive diversification at the beginning of development. This paper analyses the effects of productivity and country size on the extent of trade structure diversification. Using a testable version of the Ricardian model, we show that relative export variety is an outcome of two forces: a relative productivity change (technological progress) and a relative country size change (labour force growth). The model predictions are validated empirically using product-level trade data for a sample of 132 countries (1988–2014), including 53 low-income countries. We find a robust positive relationship between export variety and the countries' relative productivity, as well as a negative relationship between export variety and the expansion of foreign economies (i.e., the growth of the RoW). The effect of technology differences on export variety is driving diversification especially at the beginning of the development process. The results are robust to changes in the measurement of export variety (also in terms of economic complexity), in the set of control variables, or in the estimation methods. [ABSTRACT FROM AUTHOR]

• We present a multinomial approach not previously used in the macroeconomic literature for the study of growth and industrial dynamic. • The successful growth dynamic observed during the 1995–2014 period in several emerging economies is very heterogeneous in terms of their industrial transformation. • Developed economies grew slowly and, generally, through episodes of limited industrial transformation. • The relationship between economic fitness and the countries' industrial and growth dynamics generates a path dependency in economic development. • The fitness score of a country –that moves very slowly during one or two decades– establishes the most common sequences of episodes to be observed. When analyzing countries' medium- and long-term economic performance, it is important to study jointly the dynamic of growth and the industrial evolution that determines how the productive structure changes over time. In this paper, we use the Economic Fitness metric to describe the competitiveness of the countries' industrial structure, and classify economic episodes, with five-years windows, to establish how countries grow (i.e., above or below a trend, and with a dynamic or static industrial structure.) We show a complex growth dynamic using data covering two decades (1995–2014) for a large set of countries. This pattern indicates that the observed sequences of spells vary substantially even between countries within the same growth regime (low, medium, and high). Moreover, we find a robust statistical relationship between these spells and Economic Fitness with a multinomial econometric model. In particular, we show that economies with higher fitness are more resilient since episodes of below-average growth and the net disappearance of competitive firms are less likely to happen. [ABSTRACT FROM AUTHOR]

• China implemented the heavy industry priority development strategy rather than the comparative advantage development strategy in the early years of new China. • A dynamic optimization model including the labor-intensive goods sector, the capital-intensive goods sector, and the final goods sector is constructed to study the rationality of the heavy industry priority development strategy. • The relationship between the total social output per capita and the share of heavy industry capital stock is inverted U-shape. • Heavy industry, as basic industry, provides the necessary material conditions for the subsequent comparative advantage development strategy. Based on the objective fact that new China had a weak industrial base during the planned economy period and the policies implemented, this paper constructs a dynamic optimization model that includes the labor-intensive goods sector, the capital-intensive goods sector, and the final goods sector. The basic conclusion of the theoretical model is that there is an inverted-U relationship between total social output per capita and the share of heavy industry capital stock on the optimal dynamic path of capital accumulation with government intervention, i.e., the relationship is positive until a specific threshold is reached, beyond which it becomes negative. The results of the benchmark regressions and endogeneity tests confirm the inverted-U relationship, although the threshold share of heavy industry capital stock differs among the empirical models. [ABSTRACT FROM AUTHOR]

• Although certain policy approaches are prominent in specific stages of economic development, each stage is characterised by a mix of policies. • While sectoral and microeconomic policies prevail at early and advanced stages respectively, both are present to varying extents in all stages. • The function of each policy approach within the policy mix varies depending on the stage of development. • The paper compares structural, allocative and evolutionary theories to interpret the economic policy at different stages of development. Strategies of economic development differ widely in terms of approaches to State intervention. However, across countries, certain policies tend to prevail at specific stages of development. For example, the Italian and South Korean cases, analysed in this paper, suggest the prevalence of sectoral policies at early stages, followed by a reorientation towards microeconomic policies at later stages. The paper interprets this trend through the viewpoints of three theoretical perspectives: structural, allocative and evolutionary. The historical and theoretical analysis of the paper shows that, even if each stage of development is characterised by the prominence of a specific policy over others, a mix of policies is pursued at each stage. In addition, the functions of each policy approach vary depending on the stage. This finding highlights unexpected linkages between theory and policy, and the need to consider different theoretical perspectives to understand the multifaceted character of economic policy. [ABSTRACT FROM AUTHOR]

Abstract This paper argues that structural approaches to the analysis of economic systems provide useful theoretical insights for the definition of industrial policy. In particular, radical structural changes represent 'industrial revolutions' between manufacturing regimes. This paper addresses industrial policy as a policy of transitional (medium-term) dynamics. We analyse industrial revolutions, from the first to the on-going fourth industrial revolution, and discuss both the structural changes implied, namely the shift between manufacturing regimes, and the implications for industrial policy. [ABSTRACT FROM AUTHOR]

Abstract The conventional macroeconomic policy framework, with its focus on maintaining macro stability is inadequate for the purpose of accelerating the structural transformation of African economies. This 'policy position' paper explores an alternative framework, wherein macroeconomic policies are applied coherently to one another and in coordination with other policies, and a resolution of the short-run trade-off between the macroeconomic policy objectives of stabilisation and development is sought in terms of a long-term development approach for enhancing both aggregate demand and supply capacity as an anchor for navigating a path towards structural transformation. After presenting a working definition of structural transformation, the paper presents the core elements of such a framework and discusses the corresponding policy agenda under five headings. Using this agenda as a benchmark, it discusses how to approach the debates on fiscal, monetary and financial policies, avoiding the limitations of standard macroeconomic literature, in order to make those policies conducive to Africa's structural transformation. [ABSTRACT FROM AUTHOR]

Highlights • The paper covers global developments regarding trade and the importance of international production networks using the WIOD database. • Integration by 'potententially catching-up economies' (PCUs) into IPNs is very uneven both globally and in the European context. • This gives rise to serious agglomeration phenomena of export capacities in some and to 'structural external imbalances' in other sub-sets of PCUs hindering a sustained growth process. • The paper develops the concept of 'appropriate industrial policy' which takes account of the specific developmental conditions of individual countries and regions. • It criticises recent EC policy suggestions in the area of industrial policy as being too much focussed on innovation policy in advanced economies and being guided by a 'level playing field' framework that fails to take account of differentiated needs in PCUs. Abstract The global economy has been undergoing rapid structural change: the impressive development processes in a range of emerging economies have induced strong shifts in global trade shares; international production networks (IPNs) are characterising regional and global trading relationships and we observe also persistent changes in the positions of countries in global value chains due to rather rapid technological and human capital up-grading. The aim of this paper is to assess these developments, but also discuss the importance of – what we call – 'appropriate industrial policy' (AIP) for countries at different developmental stages to support their position in the current global context. We shall emphasise in particular the role of AIP for European low- and medium-income economies (LMIEs) as the recent financial and economic crisis has shown that they are particularly vulnerable with respect to 'structural external imbalances' and thus policies to support their tradable sectors are of great importance. [ABSTRACT FROM AUTHOR]

• There exists a nonlinear, hump-shaped pattern between prefecture-level trade openness and manufacture labor share in China. • Internal geography is critical in shaping patterns of trade-induced structural change. • Internal reallocations of resources across regions and sectors within one country are central to the economic development. • Place-based policies based on regional stage of structural transformation are needed. Notable heterogeneity regarding international trade openness and level of development across different regions with significant inter-provincial migration has been a prominent feature in contemporary China. This paper studies the particular role of international trade in the structural transformation across each region in China. Combining several data, we document that there exhibits a non-monotone, hump-shaped relationship between international trade freeness and prefecture-level manufacture labor share in China. We rationalize this stylized fact in a spatial equilibrium model with multi-region, multi-sector, costly trade and endogenous allocation of labor, capital, and land. The analysis highlights the role of internal geography in shaping patterns of trade-induced structural change. [ABSTRACT FROM AUTHOR]

The article identifies foundational principles of the structural analysis of economic, political and social systems, and explores their bearing on the study of structural transformations. In doing so, it delves especially into the conceptual resources provided by strands of economic theory. Particular importance is given to the relative positions of socio-economic groups, productive sectors, and institutions; the relative invariance of certain patterns of interdependence vis-à-vis others; and the view of economic dynamics as structural transformation subject to the condition of relative invariance. The article goes on to introduce and discuss a collection of papers that explore the relationship between structures and transformations in economic, political and social systems. A fundamental theme is the relationship between the range of transformations made possible by structures and the individual or collective actions taking place within those structures, which lead to some structural transformations instead of others. [ABSTRACT FROM AUTHOR]

Highlights • Agriculture grew much faster in output and labour productivity in China than in Australia, Canada, India, Japan and the United States. • The unprecedented growth in China was mainly driven by multifactor productivity improvements. • Agriculture has been playing a diminishing role in the Chinese economy as in all the developed countries. • The diminishing importance is an outcome of market forces in balancing various demands and supplies for goods and services as an economy advances and income rises. Abstract This paper studies the evolution of the agricultural sector in the Chinese economy, with a comparison to a number of selected economies that are at different stages of economic development. It shows that China’s unprecedented agricultural growth comparing to other emerging and developed countries was mainly driven by its world-beating productivity improvement, resulting from a series of fundamental reforms that have been undertaken in the Chinese agricultural sector since 1978. Despite the remarkable achievement, however, agriculture is playing a diminishing role in the growing Chinese economy, including declining agricultural employment. The paper illustrates that, as in other developed countries, the decline trend in China is an outcome of market forces in balancing various demands and supplies for goods and services as income rises. The research results will have important implications for further policy designs that seek to maintain a healthy agricultural growth in China in the future. [ABSTRACT FROM AUTHOR]

This paper outlines an evolutionary and an historical theoretical framework to identify and propose taxonomic principles that can be used to analyze whether or not a given regional economic integration (REI) arrangement is transformative and developmental. Using this framework, it looks into the relationship between industrialization and regional economic integration in Sub-Saharan Africa (SSA). It also looks at how asymmetric economic integration with advanced economies has affected industrialization and symmetric economic integration in Africa. Based on historical evidence, the paper concludes that there is a positive, circular and cumulative relationship between industrialization and regional economic integration in SSA. It also concludes that the asymmetric economic integration of SSA economies with advanced ones has had negative, circular and cumulative impact on industrialization and (symmetric) economic integration in SSA. Therefore, it argues that, if industrialization and transformative REI is to take place in SSA, there is a need for making context-specific, dynamic and transformative industrial policies as center pieces of development strategies, for rethinking REI initiatives in such a way that they facilitate and amplify the effectiveness of these industrial policies and strategies, and for replacing the legacies of colonialism and neoliberal globalization with strategic integration of SSA economies vis . advanced economies. [ABSTRACT FROM AUTHOR]

• We argue that government development strategy and resource misallocation are key determinants of economic development in LDCs, i.e. China. • Our theoretical model reveals that a greater emphasis on heavy-industry-oriented development results in a larger capitalto-output ratio and lower per-capita output. • Empirically, we find that a larger capital-to-output ratio and lower TFP are associated with a greater degree of misallocation driven by government development strategy. This paper provides a consistent explanation for the distinct economic performance among the Less Developed Countries (LDCs) from the perspective of government development strategy. We argue that government development strategy and resource misallocation are key determinants of economic development in LDCs, i.e. China. Descriptive statistics show that China's capital-to-output ratio is negatively correlated with per-capita output, which contradicts the predictions of standard neoclassical growth theory. We incorporate governmental heavy-industry-oriented development strategy into a two-sector model to understand this puzzle. Our theoretical model reveals that a greater emphasis on heavy-industry-oriented development results in a larger capital-to-output ratio and lower per-capita output. We test our hypothesis against other theories using prefecture-level and firm data from China. We find that a larger capital-to-output ratio is associated with a greater degree of misallocation driven by government development strategy. A heavy-industry-oriented strategy will result in greater misallocation and lower TFP, which is consistent with our hypothesis. [ABSTRACT FROM AUTHOR]

• I decompose export concentration along the extensive, quantity and quality margins. • Export restructuring has more impact than widening product mix or quality upgrading. • Successful restructuring accounts for world demand and potential to improve quality. • Low-income countries progress along the extensive and quality margins more rapidly. • At a high level of economic development, export re-specialization is not pronounced. This paper examines structural transformation along the development path by linking export concentration to economic development in a cross-country setting. I explore the role of widening product mix, export restructuring and quality upgrading for the patterns of export concentration measured by the weighted Theil index. This study contributes to the literature by developing the decomposition of this index into the extensive, quantitative and qualitative components. I find that structural transformation is primarily driven by export restructuring according to the world demand and towards the products with higher potential to improve quality. Controlling for the world demand, re-specialization is not pronounced at a high level of economic development, while the ability to upgrade quality becomes increasingly important for the higher-middle-income and high-income countries. [ABSTRACT FROM AUTHOR]

Recent contributions of the development economics literature question the role of the manufacturing sector as an engine of growth. The experience of countries like India, which is investing in the services sector, and failures of industrialization in Africa and Latin America have led to scepticism about the effectiveness of manufacturing to foster development. The contribution of this paper is twofold. First, with the use of GMM techniques to treat the endogeneity bias and a sample of 80 countries for the period 1980–2010, the paper provides new evidence supporting the role of the manufacturing sector as an engine of growth. Second, the paper investigates which fuel is best for the engine. By applying a LMDI (Log Mean Divisia Index) technique, we decompose the manufacturing sector's growth rate into components of structural transformation and employment scale. Whereas structural transformation refers to an increase of manufacturing value added based on drivers that strengthen manufacturing industries (in terms of manufacturing productivity and manufacturing labour share), the employment scale component refers to an increase of manufacturing value added based on a driver (total employment) that does not promote a transition in which the manufacturing sector assumes a leading role. We find that structural transformation rather than employment scale effects enhances economic growth and that not every dollar for additional industrialization matters for development. [ABSTRACT FROM AUTHOR]

This paper introduces a new measure of structural change labeled the effective structural change (ESC) index, and applies it to study the effects of structural change on economic growth, using a sample of 19 Asian economies for the period from 1970 to 2012. This new approach provides an effective tool to examine growth effects of structural change. The paper’s findings suggest the importance of reforms to foster productivity-enhancing structural change and need for strategies to overcome their short-term costs. The paper also indicates that ESC can be used as a useful indicator for monitoring the impacts of structural reforms. [ABSTRACT FROM AUTHOR]

• There is no evidence supporting invariant tendencies in deindustrialisation. • Sectoral technological opportunities and learning regimes matter. • A diversified employment structure fosters catching-up. • Globalization accelerates deindustrialization and hinders development opportunities for most. Contrary to the notion of a natural tendency in deindustrialization, this paper, performing a cross-country long-term analysis, documents the existence of a variety of patterns of deindustrialization. Looking at industrial sectors and their technological characteristics, categorised on the ground of the Pavitt (1984) taxonomy, we do find a markedly uneven process of deindustrialization with Science Based and Specialised Suppliers not presenting any inverted U-shaped pattern, neither in employment nor in value added. The heterogeneity holds both for the four Pavitt aggregates and under further disaggregation at industry level. We then study whether the uneven sectoral composition had an impact on the timing of deindustrialization. Overall, our analysis supports the notion that "microchips" are not "potato chips" in their influence on the patterns of long-term economic development of different countries. Moreover, during the phase of globalization the probability for low-income countries to be stuck to produce "potato chips" has increased and that of transition toward the production of "microchips" has been reducing. [ABSTRACT FROM AUTHOR]

The objective of this paper is to evaluate the role of the manufacturing sector in the development process based on two laws of Kaldor. The first law states that the higher the growth of the manufacturing output, the more significant is the growth rate of the economy's product as a whole. The second law, known as the Kaldor–Verdoorn law, establishes a deterministic relation between the growth of manufacturing productivity and manufacturing output growth. This paper begins showing stylized facts of the production and exports of manufactured goods to show that these remain related to the income level of countries in recent years. Thereafter, a theoretical reflection on the importance of manufacturing in the process of economic development is performed, associating it to the manufacturing exports and to the exchange rate regime. Then, the paper performs a Kaldorian model systematization to assess the importance of manufacturing and its exports on the economic development. Econometric tests are performed based on a dynamic panel data for a sample of 63 middle and high-income countries, excluding major exporters of fuels for the period between 1990 and 2011, to analyze whether there is any difference in growth dynamics between these two groups. Estimates attest the occurrence of the two Kaldor laws, demonstrating that output growth in the manufacturing sector is essential to increasing economic growth and productivity, particularly in middle-income economies. The results also confirm that manufacturing exports are relevant to the development process and that the exchange rate contributes to this process in middle-income countries. [ABSTRACT FROM AUTHOR]

In the context of globalization, China has been widely regarded as the most successful country in the world in utilizing inward foreign direct investment (FDI) for economic development. The mainstream of the literature has produced a wide range of studies that are largely within the theoretical framework of neoclassical economics, and they tend to conclude that FDI has contributed significantly to Chinese economic development—through capital formation, export expansion, technology transfer, and the transformation of the economic structures and institutions. The objective of this paper is to assess the role of FDI in Chinese economic development with reference to the broader theoretical literature on FDI and late development, which encompasses structuralism and radical political economy along with neoclassical economics. From the perspectives of the broader literature, the analyses of the paper find that FDI in China has indeed promoted economic development in one respect (improving allocative efficiency), but has also had unfavourable effect in another respect (worsening productive efficiency), resulting in an overall impact that tends to be on the negative side. The mainstream story of China is thus judged to be partial, and the lessons to be drawn from the experience are arguably far more complex than have been hitherto perceived. [ABSTRACT FROM AUTHOR]

• The main hypothesis is that productivity differentials across firms/sectors should be higher in developing countries. • Panel estimations test the relationship between per capita income and some measures of sectoral productivity diversification in manufacturing. • Several alternative forms of the dependent variable, and control variables, are considered. • Results suggest a negative and robust relationship between productivity differentials and per capita income. "Firms are different", and everyone knows it by direct experience. From the point of view of productivity differentials, we know that their intensity depends on the interaction of forces acting in the opposite direction, some increasing and others limiting productivity differentials. It is possible to imagine that those forces act with different intensity in developed and developing countries: the catching up process, coupled with a weaker firm selection process, could reinforce productivity differentials in the economic system of less advanced economies. Empirical indications suggest that productivity differential among firms/sectors is effectively higher in poorer countries. This paper is a step to deep this question in more general terms: it proposes and empirically tests a "development" perspective to analyze productivity differentials, and this seems a substantial novelty. Results, with a few limits, support the hypothesis that inter-industry productivity differentials are negatively associated with the level of development. [ABSTRACT FROM AUTHOR]

• There is spatial correlation of electricity consumption of China. • Analyze impact of technology and industrial structure on electricity consumption. • Industrial structure contributes more to reduce electricity consumption. • Region heterogeneity is obvious among different regions and grid service zones. The increase of electricity consumption not only leads to economic growth, but also pollutes environment due to the heavy dependence on fossil fuels. How to reduce the electricity consumption without affecting the economic development is a challenging and pivotal issue. Relevant empirical evidence is scarce, so this paper deepens the understanding of two paths to decrease electricity consumption: technological progress and upgrading of industrial structure based on spatial and heterogeneity analyses. By constructing two spatial panel models, results show that electricity consumption among provinces in China is positively spatial-related and has certain path-dependent characteristics. To promote the technological progress and optimize the industrial structure are two effective solutions to reduce electricity consumption, and the latter channel plays a more important role. Heterogeneity among different regions and grid service zones exists obviously. [ABSTRACT FROM AUTHOR]

Even though there has been massive research on the impact of trade liberalization on various aspects of economic performance, its impact on trade deficits have been virtually ignored. This is partly due to the underlying theoretical framework which is based on patently unrealistic assumptions and which rules out chronic trade deficits. Within such context, the paper argues that there is no theoretical or empirical justification for postulating an automatically balancing external trade in developing countries. Using a historical case study of Ethiopia, it also shows that chronic deficits are fundamentally structural in nature and therefore cannot be reversed without bringing about structural transformation of the economy from low-skill, low technology productive structure to high-skill, high technology intensive productive structure. It also concludes that such structural transformation cannot be realized under a liberal external trade regime which forces a country to specialize based on its 'natural' comparative advantage. [ABSTRACT FROM AUTHOR]

• A reinterpretation of the nexus between export diversification and economic growth. • We analyze the quality of export diversification in terms of structural change. • We amended the balance-of-payments-constrained growth model to fit our purpose. • We find heterogeneous results for three samples of developing countries. A consensus on the virtues of an economic development strategy based on export diversification has emerged from the recent economic literature. The purpose of this paper is to revisit that relationship by questioning the sustainability of such a strategy. Drawing on a balance of payments constrained growth model, we compare the re-composition of productive capacities that follows export diversification with the evolution of countries' external constraints. Based on econometric estimates of panel data, the lessons of the model allow us to analyze and compare, over the period 1995–2015, export diversification in three samples of developing countries, namely: Latin America, Sub-Saharan Africa and Developing Asia. [ABSTRACT FROM AUTHOR]

• Post-WWII political forces wanted to dismantle most of the state-owned enterprises. • Saraceno sketches out a pragmatic approach to economic policy-making. • He provides valuable insights on economic growth in a mixed economy. • Economic policy should merge the political sphere and the managerial one. • Competence, accountability, civicness are useful reference also in today's debate on the role of the entrepreneurial state. This paper aims to depict, through the interweaving of facts and theories, the debate in Italy on economic growth policies and on the consolidation of a mixed economy. By identifying and analysing significant phases, we will show that the theme of structural growth and economic development covers a broad temporal spectrum and reveals different positions on state capitalism. Pasquale Saraceno (1903–1991) was a key figure in shaping many of the significant phases of Italian economic policy, especially in the post-WWII period. He played a central role and provided important insights in the debates on the role of public companies and the emergence of a state-led market economy in the economic development process. [ABSTRACT FROM AUTHOR]

• The model replicates empirical regularities related to diversification that emerge from the literature on economic complexity. • Diversification affects and is affected by structural economic dynamics. • Path dependency in the innovation process constrains the options for future innovation and diversification. • The dynamics of diversification result in income disparities across countries over time. Economic diversification is relevant for poorer developing countries to create jobs and foster economic development. The empirical economic literature has identified several stylized facts about the pattern of diversification of economies, but the development of explanations for those patterns, in general, has been only loosely associated with an economic theory on growth, trade, technology change and structural transformation. Making that connection is relevant because it could inform policymakers in developing countries in designing and implementing policies for promoting diversification. This paper presents a model of structural economic dynamics and endogenous technological change that can replicate empirical regularities related to economic diversification. [ABSTRACT FROM AUTHOR]

• Visualize spatial clustering effects of carbon emissions and high-tech industry. • Employ spatial STRIPAT-Durbin panel model for simulating influencing factors. • Estimate the spatial spillover effects of high-tech industry on carbon emissions. This paper constructed a spatial panel STRIPAT-Durbin model using data for 30 Chinese provinces during the period of 2004–2016. It examined the influence of economic development and the industrial structure on carbon emissions by exploring the spatial agglomeration and spillover effects of high-tech industry, economic growth, FDI, population and carbon emissions based on spatial correlation. The empirical results showed that high-tech industry, FDI, population and carbon emissions have spatial dependence and spatial agglomeration effects. High-tech industries, FDI and population have a spatial spillover effect on carbon emissions. Therefore, the government should develop a low-carbon economy by increasing the proportion of high-tech industry through technological progress and developing vigorous resource-saving and environmentally friendly tertiary industry by promoting cleaner production technology. Furthermore, local governments at all levels should use their location to promote the flow of industry transfer and technology and achieve a high inter-regional carbon industry flow and reasonable spatial distribution. [ABSTRACT FROM AUTHOR]

• Regional economic development model directly impacts China's provinces' level of technical efficiency. • The lower the level of economic development, the greater the impact of structural variables on technical efficiency with carbon emission factor. • The number of best-practice provinces with carbon emission factored in is more than that with carbon emission netted out. This paper applies the directional distance function to measure the technical efficiency incorporates carbon dioxide emissions as an undesirable output of 29 provinces in China from 1978 to 2015. In addition, we presented the best-practice provinces during the representative years and analyzed the structural variables of technical efficiency based on the Tobit model. This study finds that regional economic development model directly impacts its level of technical efficiency, and when the level of economic development is lower, the structural variables, such as energy, industrial and employment structure, have a greater impact on the technical efficiency of the region. Therefore, improving the economic development trajectory is the key to raising the level of regional technical efficiency. By optimizing and upgrading regional energy and industrial structures, ensuring the quality of economic development, the goal ofeconomic sustainable development can be attained. [ABSTRACT FROM AUTHOR]

• Decoupling analysis combined with LMDI is conducted for China's industrial sectors. • The decoupling relationship between industrial economic growth and CO 2 emissions is investigated. • The decomposition of influential factors and the mechanisms of impact are investigated. • The CO 2 emissions coefficient has a great reducing effect on CO 2 emissions. • High energy-consumption sectors play a dominant role in influencing the decoupling in China. In China, industry produces the largest amount of CO 2 emissions and, thus, is the area with the greatest potential for emissions reductions. In this paper, we calculate the CO 2 emissions of 18 different energy sources for China's industry and subsectors from 1991 to 2015 (including indirect emissions from production processes). The LMDI (Logarithmic Mean Divisia Index) method and the Tapio decoupling model are combined to study the dynamic evolution of the characteristics and factors influencing the CO 2 emissions. The changes in CO 2 emissions were further decomposed into emissions coefficients, energy structure, energy intensity, CO 2 emissions intensity in production processes, industrial structure, per capita output, and population size. The high energy-consumption industrial sectors were analyzed in particular. The results show that: 1) in most years, the relationship between industrial economic growth and CO 2 emissions shows a weak decoupling. Only from 1996 to 1999 and 2014 to 2015 was a strong decoupling shown. 2) For the industry as a whole, the impact of per capita output on CO 2 emissions was positive from 1991 to 2015. The second factor is population size, and its effect was more obvious for 2006–2015. The CO 2 emissions coefficient is the most significant factor in suppressing CO 2 emissions, followed by the energy intensity and the CO 2 emissions intensity in production processes. In terms of CO 2 emissions reduction, the effect of industrial structure and energy structure are not as obvious. 3) The proportion of high energy-consumption sectors' emissions to total industrial emissions shows a steadily increasing trend, from 71.60% in 1991 to 90.59% in 2015; the total emissions for the Manufacture of Non-Metallic Mineral Products subsector was the highest, followed by the Smelting and Pressing of Ferrous Metals subsector. [ABSTRACT FROM AUTHOR]

• The positive corelation has shown between gas consumption and economic growth in China means the promotion of gas consumption could improve economy. • The higher level of economy, the greater impact of natural gas on the economy is; with economy scale becoming larger, the impact of gas on economy tends to increase. • While the status of China natural gas market is much monopoly in every procedure, which caused resources waste, great producing cost, low efficiency and high price. • Measures mainly include nature gas systerm market-oriented reform, the promotion of pipeline transportation, and regulatory reform in nature gas industry. As the third-largest natural gas consumption market, natural gas is of great significance to the economic growth and structure of China. The promotion of natural gas will greatly change the production in every industry directly or indirectly. Based on the modified Cobb-Douglas function, this paper established the panel data from 30 provinces of 2000–2014 to study the relationship through panel quantile regression. The panel quantile results proved that the higher level of economy, the greater the marginal effect of natural gas is on economic growth; then considering the different economy scale of provinces, the panel data is divided into three groups, the results have drawn the same conclusion. Thus, measures to develop natural gas and reform gas market have been put forward, including deepening market-oriented reform of natural gas system, perfecting the construction and management of pipeline transportation and encouraging the consumption of natural gas. [ABSTRACT FROM AUTHOR]

• Manufacturing is the only strategic key sector in terms of driving economic growth for most developing countries in all the period analyzed. • Manufacturing has lost its relative importance in developed and developing countries in terms of linkages. • Manufacturing still has a greater capacity to influence the per capita income growth rate. This paper aims to investigate how manufacturing affects economic growth over time, especially in developing countries. We apply Panel Vector Autoregression (PVAR) for fixed effects approach, and then we estimate impulse-response functions (IRF) and forecast-error variance decomposition (FEVD) for a sample of 115 countries from 1990 to 2011. Furthermore, we apply Hirschman-Rasmussen (HR)'s Index for 29 countries for 1995, 2000, 2005 and 2010 as well as Field of Influence for this group of countries for 1995 and 2010. The main results indicate that manufacturing industry can work as "engine of growth" in developing countries. Moreover, manufacturing is the only strategic key sector in terms of driving economic growth for most developing countries in all the period analyzed. However, manufacturing has lost its relative importance in developed and developing countries in terms of linkages. [ABSTRACT FROM AUTHOR]

• Effects of trade and financial liberalisation on a developing country economic growth. • Brazilian economic growth dependent on the international scenario. • Effects of the real exchange rate on the Brazilian economic growth. Brazil liberalised its trade and finance in the 1990s as a strategy for higher economic growth. However, the country's GDP growth has been unstable and low compared to its own performance during the industrialization period. This paper builds a model of economic growth that accounts for the main components of effective demand as well as important specificities of emerging economies to explain the economic dynamics after the liberalising reforms. The model is estimated for the case of Brazil from 1990 to 2014 and the results suggest that this economy became highly dependent on the world economic growth and the evolution of the real exchange rate. The main finding is that Brazil experiences higher economic growth only in favourable world scenarios but the evolution of the real exchange rate in this scenario may stimulate investments that only reinforce the existing productive structure, affecting negatively the long-run economic growth. [ABSTRACT FROM AUTHOR]

Highlights • This paper took economic factor into account in the decomposition model. • Analyzing the trend of factors that influencing the transportation sectors. • Comparing the difference of the same factor played on passenger and freight transportation. • Solving the economic and management problem among the decomposition results. Abstract To identify the similarities and differences of the role that driving factors playing in carbon dioxide emissions between passenger and freight transportation sectors, this work uses an LMDI (Log-Mean Divisia Index) method to decompose factors that influence carbon dioxide emissions in China's passenger and freight transportation sectors between 1990 and 2015. The results indicate that: (1) Carbon dioxide emissions of passenger and freight transportation underwent growth from 1990 to 2015; (2) Per capita GDP, and population promoted the increase of carbon dioxide emissions for both passenger and freight transportation, and transportation structure promoted the increase of carbon dioxide emissions for freight. Among them the economic factor made the biggest contribution; (3) Activity intensity restrained the increase of carbon dioxide emissions and transportation structure restrained the increase of carbon dioxide emissions for passenger. [ABSTRACT FROM AUTHOR]

Pervasive credit constraints have been seen as major sources of slow growth in developing economies. This paper clarifies a mechanism through which an inefficient financial system can reduce productivity growth. Using a two-sector model, second, we examine the implications for employment and the distribution of income. Both classical and Keynesian versions of the model are considered; saving decisions are central in the classical version while firms’ investment and pricing decisions take center stage in the Keynesian version. We find that, although boosting the asymptotic rate of growth, a relaxation of credit constraints may reduce the share of the formal sector, increase inequality and underemployment, and have little or no effect on the medium-run rate of growth. [ABSTRACT FROM AUTHOR]

A wide range of economic development theoreticians has discussed the manufacturing sector’s properties as an engine for economic growth. More recently, the sophisticated services sector began to share similar characteristics with the industrial sector as a driver for economic growth, particularly as a locus of technological innovation. This paper considers the symbiotic relationship between these two sectors, and assesses their importance in the technological development of countries. More precisely, this study uses economic complexity analysis and input-output matrices to assess the importance of employment creation in advanced sectors of countries. Results show that in the long-run economic complexity depends on the effort and the ability of countries to generate employment in manufacturing and sophisticated services sectors. [ABSTRACT FROM AUTHOR]

Nicholas Kaldor’s contribution to economic theory covers a wide range of topics, elaborated in different historical contexts, such as theories of economic growth and the balance of payments, studies on interregional divergences and monetary theory. In most cases, historians of economic thought have devoted their attention to single aspects of his contributions. This paper aims at integrating Kaldor’s monetary theory and his view of the relevance of increasing returns. It will be shown that, in Kaldor’s view, economic growth is driven by increasing effective demand which, in turn, positively affects the path of labour productivity, and that this mechanism is fully in operation on the condition that the banking sector does not restrict credit supply. [ABSTRACT FROM AUTHOR]

Mexico, as other Latin American countries, undertook far-reaching economic reforms in the 1980s and 1990s in a wide array of areas. Over the past three decades, the Mexican economy has gone through a structural change and experienced a successful insertion into global markets. Yet productivity growth has been modest, leading to low and volatile economic growth. To examine the weak association between structural change and productivity growth, two features are studied: inter- and intra-industry transformations, and the contribution of production factors to value added growth. The paper shows that despite a significant reallocation of hours worked across industries, its aggregate impact has been hindered by the prevalence of flows from sectors with high labor productivity growth towards those with lower or declining productivity growth. In addition, highly qualified production factors (both labor and capital) have not showed a significant contribution to value added growth. [ABSTRACT FROM AUTHOR]

This paper investigates the mechanics through which novel technological principles are developed and diffused throughout an economy consisting of a technologically heterogeneous ensemble of firms. In this model entrepreneurs invest in the discovery and in the diffusion of a technological principle. We argue that if the technological distance between goods is sufficiently large, then the economy is trapped in a no-growth equilibrium where innovations remain isolated events, while if it is sufficiently short, then innovations eventually percolate throughout the whole economy, leading to the emergence of general purpose technologies and sustained long run growth. [ABSTRACT FROM AUTHOR]

Non-R&D innovation activities account for a significant portion of innovation efforts carried out across very heterogeneous economies in Europe. However, to incorporate them into economic models is not always straightforward. Moreover, relying only on R&D data does not capture well innovation in the services sector. To counter these problems, this paper builds an augmented macro-theoretical growth model where, besides R&D, non-R&D innovation activities play a key role as main drivers of TFP. The model is estimated for a sample of EU-26 countries over the period 2004–2008, showing that the distinction between R&D and non-R&D innovation activities is significant for a number of different issues. First, we find both R&D and non-R&D to be statistically significant and economic important in technological catch-up. Second, there is a differential sizable impact of R&D and non-R&D; the impact of R&D on TFP growth is found to be twice as big as that of non-R&D. And third, the two types of innovation cannot strictly been seen as complementary, at least for the case of countries with high R&D intensities or high non-R&D intensities. [ABSTRACT FROM AUTHOR]

This paper studies the effects of an (exogenous) distributional shock on accumulation and growth. We develop a model that studies the dynamics of demand, profits and investment following a change of the nominal wage-rate, which is not accompanied by a simultaneous proportional change of prices to maintain the initial distribution of income. The initial income distribution, however, is eventually restored through a gradual adjustment of prices to the new level of the nominal wage-rate. We concentrate on the process of transition from the initial to a new equilibrium and consider both cases in which the process of transition is ‘wage-led’ and case in which it is ‘profit-led’. In all cases, the dynamics of the economy is crucially affected by the firms’ initial response to the shock and it is path-dependent. [ABSTRACT FROM AUTHOR]

This paper discusses the concept of path dependence in macrodynamics, and identifies practical difficulties associated with building path-dependent macrodynamic models of the sort that Keynesians and Schumpeterians regard as necessary for the successful study of long-term growth and development. It is suggested that multi-agent systems (MAS) analysis can help address these difficulties, and therefore provides a useful tool for advancing path-dependent macrodynamic analysis. A concrete example is provided in the form of a simple but illustrative MAS model of path-dependent aggregate fluctuations. [ABSTRACT FROM AUTHOR]

In this paper we explore the role that can be played by education in economic development using a model called TEVECON. Within the population of our economic system we distinguish two different social classes which differ for their level and quality of education and, as a consequence, for their human capital, wages and income per head. We vary the investment in education as a share of total investment, the share of investment in education allocated to each social class, and the quality of education each class receives. We show that while education can exert a positive effect on social mobility by increasing the population share of the upper social class it also leads to a tradeoff between income inequality and the rate of growth of income. These results are obtained based only on education and do not take into account any wealth effects. [ABSTRACT FROM AUTHOR]

The paper carries out an analysis of long-run development paths in Latin America in the period 1970–2010. We focus on three main dimensions—openness, industrial structure and innovation—and analyze how changes in these factors, and the specific combination of them adopted by each country, have affected its income per capita growth. We apply Johansen cointegration approach to time series data for 18 Latin American countries. The analysis leads to two main results. First, we show that Latin American countries have followed different growth trajectories depending on the combination of policies they have adopted to catch up. Secondly, we find a clear correspondence between policy strategies, on the one hand, and growth performance, on the other. Countries that have managed to combine imitation and innovation policy have experienced a higher rate of growth than those economies that have only made efforts to improve their imitation capability. [ABSTRACT FROM AUTHOR]