Stages of Diversification in a Neoclassical World

Catia Batista and Jacques Potin ()
Additional contact information
Jacques Potin: ESSEC Business School

No 7765, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Recent research has documented a U-shaped industrial concentration curve over an economy's development path. How far can neoclassical trade theory take us in explaining this pattern? We estimate the production side of the Heckscher-Ohlin model using industry data on 44 developed and developing countries for the period 1976-2000. Decomposing the implied changes in industrial concentration over time shows that at least one third of these changes seems to be explained by a Rybczynski effect. This result suggests that capital accumulation led poor countries to diversify their industrial production, while rich countries made their production more concentrated in highly capital-intensive industries.

Keywords: specialization; diversification; Heckscher-Ohlin; economic growth and international trade; industrial concentration; structural change (search for similar items in EconPapers)
JEL-codes: F11 L16 O40 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2013-11
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Economics Letters, 2014, 122 (2), 276–284

Downloads: (external link)
https://docs.iza.org/dp7765.pdf (application/pdf)

Related works:
Journal Article: Stages of diversification in a neoclassical world (2014)
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:iza:izadps:dp7765

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().