Factor Endowment, Structural Coherence, and Economic Growth

Natasha Che

No 2012/165, IMF Working Papers from International Monetary Fund

Abstract: This paper studies the linkage between structural coherence and economic growth. Structural coherence is defined as the degree that a country's industrial structure optimally reflects its factor endowment fundamentals. The paper found that at least for the overall capital, the shares of capital intensive industries were significantly bigger with higher initial capital endowment and faster capital accumulation. Moreover, there is a positive relationship between a country's aggregate output growth and the degree of structural coherence. Quantitatively, the structural coherence with respect to the overall capital explains about 30% of the growth differential among sample countries.

Keywords: WP; dependent variable; aggregate output; growth rate; Structural Coherence; Economic Growth; Structural Change; Factor Endowment; Capital Accumulation; capital endowment; capital intensity; output share; share regression; resource allocation; Capital productivity; Information technology in revenue administration; Employment; Human capital; Total factor productivity; Europe (search for similar items in EconPapers)
Pages: 42
Date: 2012-06-01
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Citations: View citations in EconPapers (4)

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