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What factors drive successful industrialization? Evidence and implications for developing countries

Author

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  • Haraguchi, Nobuya
  • Martorano, Bruno
  • Sanfilippo, Marco
Abstract
This paper analyses the drivers of successful industrialization in developing countries. We consider two different periods, 1970–1990 and 1991–2014, likely to be affected by different patterns of industrialization due to major political, technological and organizational changes. We subsequently develop a methodology to identify a small group of countries for each period, which have exhibited a pattern of industrialization that is not only remarkable in absolute terms, but also sustained. Our analysis reveals that successful industrialization is driven by a combination of factors, including a country’s initial economic conditions, factor endowments and other characteristics, such as demography and geography. We also show that other variables that policymakers can control play a crucial role. This includes, among others, the promotion of investments (both public and privately funded) and education; the management of trade and capital openness; financial sector development and the promotion of both macroeconomic and institutional stability.

Suggested Citation

  • Haraguchi, Nobuya & Martorano, Bruno & Sanfilippo, Marco, 2019. "What factors drive successful industrialization? Evidence and implications for developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 266-276.
    • Handle: RePEc:eee:streco:v:49:y:2019:i:c:p:266-276
    DOI: 10.1016/j.strueco.2018.11.002
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    More about this item

    Keywords

    Industrialization; Developing countries; Policies;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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