Scale and the origins of structural change

Francisco Buera and Joseph Kaboski

Journal of Economic Theory, 2012, vol. 147, issue 2, 684-712

Abstract: We consider broad patterns of structural change: (i) sectoral reallocations, (ii) rich movements of productive activities between home and market, and (iii) an increase in establishment size, especially in manufacturing. We extend these facts and develop a unified model explaining them. The crucial distinction across manufacturing, services and home production is the scale of the productive unit. In manufacturing, scale technologies lead to industrialization and marketization. In services, they lead to marketization and later demarketization of services. A later increase in the scale of services could yield a decline in industry and a rise in services, consistent with the data.

Keywords: Structural change; Efficient scale; Home production; Product cycles (search for similar items in EconPapers)
JEL-codes: D13 O11 O14 O33 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (73)

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Working Paper: Scale and the origins of structural change (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:147:y:2012:i:2:p:684-712

DOI: 10.1016/j.jet.2010.11.007

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