Productive Capacities, Economic Growth and Economic Growth Volatility in Developing Countries: Does Structural Economic Vulnerability Matter?

Sena Kimm Gnangnon ()
Additional contact information
Sena Kimm Gnangnon: Development Division, World Trade Organization, Rue de Lausanne 154, CH-1211 Geneva 21, Switzerland

Journal of International Commerce, Economics and Policy (JICEP), 2025, vol. 16, issue 01, 1-66

Abstract: Recent years’ global shocks (e.g., the 2008 financial crisis and the COVID-19 pandemic) and environmental shocks — such as natural disasters — have heightened the vulnerability of developing countries to future shocks, and can compromise their development prospects. International institutions and researchers have advocated that the strengthening of productive capacities in these countries would help enhance the resilience of their economies to shocks, and promote sustainable development. This paper has examined the effect of productive capacities on economic growth and economic growth volatility in developing countries, in particular when they face a high level of structural economic vulnerability. The analysis covers 117 developing countries over the period of 2000–2018. It shows that productive capacities not only promote economic growth, but also reduce economic growth volatility. On the other hand, structural economic vulnerability reduces economic growth (in particular when it exceeds a certain level), and induces greater volatility of economic growth. Interestingly, productive capacities promote economic growth and reduce economic growth volatility in countries that face a high degree of structural economic vulnerability. These findings support the recommendation by international institutions and researchers that if they were to enhance the resilience of their economies to shocks, and promote sustainable economic growth, developing countries (in particular the poorest ones) should strengthen their productive capacities.

Keywords: Productive capacities; economic growth; economic growth volatility; structural economic vulnerability (search for similar items in EconPapers)
JEL-codes: D24 E32 O10 O40 O47 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1793993325500012
Access to full text is restricted to subscribers

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:wsi:jicepx:v:16:y:2025:i:01:n:s1793993325500012

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1793993325500012

Access Statistics for this article

Journal of International Commerce, Economics and Policy (JICEP) is currently edited by Ramkishen S. Rajan

More articles in Journal of International Commerce, Economics and Policy (JICEP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().