Industrialization of developing economies in the global economy with an infectious disease

Sato Hitoshi

No 815, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Manufacturing has long been the center of industrialization strategies for poor developingcountries. This paper first investigates the effects of labor supply constraints onindustrialization, which may have been caused by the coronavirus disease 2019 (COVID-19).Then, the study examines how manufacturing automation could affect industrialized developingeconomies based on the premise that manufacturers may accelerate production automation inresponse to the COVID-19 pandemic. The model predicts declines in developing economies’manufacturing competitiveness and a heterogeneous pattern of recovery from the COVID-19recession. In comparison, developing economies with large manufacturing bases would recoverrelatively quickly, whereas those with weaker manufacturing bases would suffer from along-term decline and manufacturing contraction trends (undesirable deindustrialization).Manufacturing automation can enhance economic welfare, causing a contraction in theunproductive non-tradable good (service) sector. However, with low labor mobility, the welfareeffect is ambiguous, thereby widening the wage gap between skilled and unskilled labor.

Keywords: COVID-19; industrialization; automation; financial globalization; social mobility (search for similar items in EconPapers)
JEL-codes: F12 F16 O14 (search for similar items in EconPapers)
Date: 2021-03
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 815. 2021-03

Downloads: (external link)
https://ir.ide.go.jp/record/52091/files/IDP000815_001.pdf First version, 2021 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jet:dpaper:dpaper815

Ordering information: This working paper can be ordered from
Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
http://www.ide.go.jp/English/Publish/Order

Access Statistics for this paper

More papers in IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO) Contact information at EDIRC.
Bibliographic data for series maintained by Michitaka Imamitsu ().