Premature deindustrialization in post-Soviet economies

Hiroyuki Taguchi (tagusaya0710@s3.wh.qit.ne.jp) and Abdullaev Elbek

MPRA Paper from University Library of Munich, Germany

Abstract: This article aims to examine the deindustrialization in the post-Soviet economies from the perspective of the premature deindustrialization hypothesis, and also to investigate the factors that cause the deindustrialization: a comparative advantage in manufacturing, the Dutch Disease factor, human capital and institutions. This study takes the following two steps: first, to show the degree of the deindustrialization by their country-specific fixed effect in the estimation of manufacturing-population-income relationships, and second, to reveal the contributions of the deindustrialization factors to the country-specific fixed effect. The main findings from the empirical estimations are summarized as follows. First, the result of the fixed-effect model estimation suggested the existence of the deindustrialization in the ten middle-income countries out of the total 15 post-Soviet countries. Second, the outcomes of the factor-analyses revealed that the deindustrialization in the ten countries is fully explained by their comparative disadvantages in manufacturing as the overall contributor, and further by the sub-factors: the lack of human capital, the Dutch Disease effect (mainly in Azerbaijan, Kazakhstan, Russian Federation, and Uzbekistan) and immature institutions (mainly in Kyrgyz, Tajikistan, Ukraine, and Uzbekistan).

Keywords: Deindustrialization; Post-Soviet economies; Dutch Disease; Human capital; Institutions; and Manufacturing (search for similar items in EconPapers)
JEL-codes: O14 O57 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-cis and nep-tra
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