Does Premature Deindustrialization Matter ? The Role of Manufacturing versus Services in Development

Gaurav Nayyar, Marcio Cruz and Linghui Zhu

No 8596, Policy Research Working Paper Series from The World Bank

Abstract: The shares of manufacturing in value added and employment across a range of developing economies peaked at lower levels of per capita income compared with their high-income, early-industrializer precursors. Based on the statistical analysis of input-output tables and firm-level data, the paper contributes to the discussion on whether this"premature deindustrialization"matters by showing that: a) the premature declining share of the manufacturing sector is largely not driven by a statistical artifice whereby what was earlier subsumed in manufacturing value added is now accounted for as service sector contributions; b) Some features of manufacturing that were thought of as uniquely special for development, such as scale economies, exports, and innovation, are increasingly shared by services sector firms. Yet, a given service subsector is unlikely to provide opportunities for productivity growth and job creation for unskilled labor simultaneously; c) Some high-productivity services serve final demand or derive demand from several sectors, while others are more closely linked to a manufacturing base.

Keywords: Textiles; Apparel&Leather Industry; Business Cycles and Stabilization Policies; General Manufacturing; Construction Industry; Common Carriers Industry; Food&Beverage Industry; Plastics&Rubber Industry; Pulp&Paper Industry; International Trade and Trade Rules; Transport Services; Public Sector Administrative and Civil Service Reform; Public Sector Administrative&Civil Service Reform; Economics and Finance of Public Institution Development; De Facto Governments; Democratic Government; Trade and Services (search for similar items in EconPapers)
Date: 2018-09-20
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://documents.worldbank.org/curated/en/800011537457179243/pdf/WPS8596.pdf (application/pdf)

Related works:
Journal Article: Does Premature Deindustrialization Matter? The Role of Manufacturing versus Services in Development (2021)
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:wbk:wbrwps:8596

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().