Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v59y2021icp454-469.html
   My bibliography  Save this article

Deindustrialization in developed countries amid accelerated globalization: Patterns, influencers, and policy insights

Author

Listed:
  • Vu, Khuong
  • Haraguchi, Nobuya
  • Amann, Juergen
Abstract
This paper examines the dynamics of deindustrialization in developed countries during the 1970–2015 period, investigating the patterns and factors underlying manufacturing employment growth in 12 developed economies. The study discloses seven key findings with valuable policy insights. In particular, the paper shows that deindustrialization is a persistent pattern that experienced a significant structural change in the post-1990 period, in which the acceleration of globalization with the rise of North-South trade appeared to have a significant effect. Furthermore, industries with higher relative labour productivity are significantly more resistant to deindustrialization, particularly in the post-1990 period, and this effect is stronger for low-tech industries. In addition, deindustrialization tends to be more severe in countries with larger populations and a deficit-prone trade balance, and these links have become more pronounced in the post-1990 period.

Suggested Citation

  • Vu, Khuong & Haraguchi, Nobuya & Amann, Juergen, 2021. "Deindustrialization in developed countries amid accelerated globalization: Patterns, influencers, and policy insights," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 454-469.
    • Handle: RePEc:eee:streco:v:59:y:2021:i:c:p:454-469
    DOI: 10.1016/j.strueco.2021.09.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X21001272
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2021.09.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vanessa S. Tchamyou & Simplice A. Asongu, 2017. "Information Sharing and Financial Sector Development in Africa," Journal of African Business, Taylor & Francis Journals, vol. 18(1), pages 24-49, January.
    2. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    3. Boateng, Agyenim & Asongu, Simplice & Akamavi, Raphael & Tchamyou, Vanessa, 2018. "Information asymmetry and market power in the African banking industry," Journal of Multinational Financial Management, Elsevier, vol. 44(C), pages 69-83.
    4. Ken Coutts & Robert Rowthorn, 2013. "De-industrialisation & the Balance of Payments in Advanced Economies," Working Papers wp453, Centre for Business Research, University of Cambridge.
    5. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    6. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 869-882.
    7. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2016. "The Mobile Phone in the Diffusion of Knowledge for Institutional Quality in Sub-Saharan Africa," World Development, Elsevier, vol. 86(C), pages 133-147.
    8. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    9. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Restructuring and productivity growth in uk manufacturing," Economic Journal, Royal Economic Society, vol. 113(489), pages 666-694, July.
    10. Wright, Greg C., 2014. "Revisiting the employment impact of offshoring," European Economic Review, Elsevier, vol. 66(C), pages 63-83.
    11. Eicher, Theo S. & Schreiber, Till, 2010. "Structural policies and growth: Time series evidence from a natural experiment," Journal of Development Economics, Elsevier, vol. 91(1), pages 169-179, January.
    12. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2017. "Trade and Manufacturing Jobs in Germany," American Economic Review, American Economic Association, vol. 107(5), pages 337-342, May.
    13. Egger, Hartmut & Fischer, Christian, 2020. "Increasing resistance to globalization: The role of trade in tasks," European Economic Review, Elsevier, vol. 126(C).
    14. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2008. "Income and Democracy," American Economic Review, American Economic Association, vol. 98(3), pages 808-842, June.
    15. Adrian Wood, 1997. "How Trade Hurt Unskilled Workers," Palgrave Macmillan Books, in: Jitendralal Borkakoti & Chris Milner (ed.), International Trade and Labour Markets, chapter 7, pages 140-168, Palgrave Macmillan.
    16. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    17. Robert Rowthorn & Ken Coutts, 2004. "De-industrialisation and the balance of payments in advanced economies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 767-790, September.
    18. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2020. "Structural change in times of increasing openness: assessing path dependency in European economic integration," Journal of Evolutionary Economics, Springer, vol. 30(5), pages 1467-1495, November.
    19. Dosi, Giovanni & Grazzi, Marco & Moschella, Daniele, 2015. "Technology and costs in international competitiveness: From countries and sectors to firms," Research Policy, Elsevier, vol. 44(10), pages 1795-1814.
    20. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-1395, November.
    21. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2021. "Adjusting to Globalization in Germany," Journal of Labor Economics, University of Chicago Press, vol. 39(1), pages 263-302.
    22. Keller, Wolfgang & Utar, Hale, 2023. "International trade and job polarization: Evidence at the worker level," Journal of International Economics, Elsevier, vol. 145(C).
    23. Asli Demeirgüç-Kunt & Ross Levine (ed.), 0. "Finance and Growth," Books, Edward Elgar Publishing, number 17119.
    24. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.),Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084, Central Bank of Chile.
    25. Andrew B. Bernard & Valerie Smeets & Frederic Warzynski, 2017. "Rethinking deindustrialization," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(89), pages 5-38.
    26. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    27. David Kucera & William Milberg, 2003. "Deindustrialization and changes in manufacturing trade: Factor content calculations for 1978–1995," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(4), pages 601-624, December.
    28. Balsvik, Ragnhild & Jensen, Sissel & Salvanes, Kjell G., 2015. "Made in China, sold in Norway: Local labor market effects of an import shock," Journal of Public Economics, Elsevier, vol. 127(C), pages 137-144.
    29. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
    30. Justin R. Pierce & Peter K. Schott, 2016. "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, American Economic Association, vol. 106(7), pages 1632-1662, July.
    31. Damoun Ashournia & Jakob MunchDaniel Nguyen, 2014. "The Impact of Chinese Import Penetration on Danish Firms and Workers," Economics Series Working Papers 703, University of Oxford, Department of Economics.
    32. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages 374-403, June.
    33. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    34. Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
    35. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
    36. Vu, K.M., 2017. "Structural change and economic growth: Empirical evidence and policy insights from Asian economies," Structural Change and Economic Dynamics, Elsevier, vol. 41(C), pages 64-77.
    37. David Autor & David Dorn & Gordon Hanson, 2019. "When Work Disappears: Manufacturing Decline and the Falling Marriage Market Value of Young Men," American Economic Review: Insights, American Economic Association, vol. 1(2), pages 161-178, September.
    38. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    39. Marcelo Soto, 2009. "System GMM Estimation With A Small Sample," UFAE and IAE Working Papers 780.09, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    40. Daron Acemoglu & David Autor & David Dorn & Gordon H. Hanson & Brendan Price, 2016. "Import Competition and the Great US Employment Sag of the 2000s," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 141-198.
    41. Asongu, Simplice A. & Biekpe, Nicholas, 2018. "ICT, information asymmetry and market power in African banking industry," Research in International Business and Finance, Elsevier, vol. 44(C), pages 518-531.
    42. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    43. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 151-167.
    44. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
    45. Mr. Sergio Rebelo & Ms. Piyabha Kongsamut & Danyang Xie, 2001. "Beyond Balanced Growth," IMF Working Papers 2001/085, International Monetary Fund.
    46. Zhang, Kevin Honglin, 2006. "FDI and Host Countries’ Exports: The Case of China," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 59(1), pages 113-127.
    47. Jeffrey M. Wooldridge, 2001. "Applications of Generalized Method of Moments Estimation," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 87-100, Fall.
    48. Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, American Economic Association, vol. 75(4), pages 806-817, September.
    49. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    50. Dorn, David & Autor, David & Hanson, Gordon, 2017. "When Work Disappears: Manufacturing Decline and the Falling Marriage-Market Value of Men," CEPR Discussion Papers 11878, C.E.P.R. Discussion Papers.
    51. Mr. Ramana Ramaswamy & Mr. Bob Rowthorn, 1997. "Deindustrialization: Causes and Implications," IMF Working Papers 1997/042, International Monetary Fund.
    52. Vishal Sarin & Suresh Kumar, 2019. "Investment Abroad And Impact At Home: A Literature Review," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 19(04), pages 1-25, December.
    53. van Neuss, Leif, 2018. "Globalization and deindustrialization in advanced countries," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 49-63.
    54. Steven Saeger, 1997. "Globalization and deindustrialization: Myth and reality in the OECD," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(4), pages 579-608, December.
    55. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    56. Vogelsang, Timothy J., 1997. "Wald-Type Tests for Detecting Breaks in the Trend Function of a Dynamic Time Series," Econometric Theory, Cambridge University Press, vol. 13(6), pages 818-848, December.
    57. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 869-882.
    58. James Bessen, 2019. "Automation and jobs: when technology boosts employment," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 34(100), pages 589-626.
    59. Vu, Khuong M., 2019. "The internet-growth link: An examination of studies with conflicting results and new evidence on the network effect," Telecommunications Policy, Elsevier, vol. 43(5), pages 474-483.
    60. Vicente Donoso & V�ctor Mart�n & Asier Minondo, 2015. "Do Differences in the Exposure to Chinese Imports Lead to Differences in Local Labour Market Outcomes? An Analysis for Spanish Provinces," Regional Studies, Taylor & Francis Journals, vol. 49(10), pages 1746-1764, October.
    61. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    62. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    63. Mr. Ramana Ramaswamy & Mr. Bob Rowthorn, 1998. "Growth, Trade, and Deindustrialization," IMF Working Papers 1998/060, International Monetary Fund.
    64. Haraguchi, Nobuya & Cheng, Charles Fang Chin & Smeets, Eveline, 2017. "The Importance of Manufacturing in Economic Development: Has This Changed?," World Development, Elsevier, vol. 93(C), pages 293-315.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Diemer, Andreas, 2023. "Divided we fall? The effect of manufacturing decline on the social capital of US communities," LSE Research Online Documents on Economics 120355, London School of Economics and Political Science, LSE Library.
    2. Destek, Mehmet Akif & Hossain, Mohammad Razib & Khan, Zeeshan, 2023. "Premature Deindustrialization and Environmental Degradation," MPRA Paper 117737, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vu, Khuong M & Asongu, Simplice, 2020. "Backwardness advantage and economic growth in the information age: A cross-country empirical study," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    2. Vu, K.M., 2017. "Structural change and economic growth: Empirical evidence and policy insights from Asian economies," Structural Change and Economic Dynamics, Elsevier, vol. 41(C), pages 64-77.
    3. van Neuss, Leif, 2018. "Globalization and deindustrialization in advanced countries," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 49-63.
    4. Simplice A. Asongu & Nicholas M. Odhiambo, 2020. "Remittances, the diffusion of information and industrialisation in Africa," Contemporary Social Science, Taylor & Francis Journals, vol. 15(1), pages 98-117, January.
    5. Efobi, Uchenna & Asongu, Simplice & Okafor, Chinelo & Tchamyou, Vanessa & Tanankem, Belmondo, 2019. "Remittances, finance and industrialisation in Africa," Journal of Multinational Financial Management, Elsevier, vol. 49(C), pages 54-66.
    6. Asongu, Simplice A. & Odhiambo, Nicholas M., 2020. "Foreign direct investment, information technology and economic growth dynamics in Sub-Saharan Africa," Telecommunications Policy, Elsevier, vol. 44(1).
    7. Simplice A. Asongu & Nicholas M. Odhiambo, 2019. "Governance, capital flight and industrialisation in Africa," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-22, December.
    8. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 151-167.
    9. Asongu, Simplice & le Roux, Sara & Nwachukwu, Jacinta & Pyke, Chris, 2018. "The Mobile Phone as an Argument for Good Governance in Sub-Saharan Africa," MPRA Paper 89364, University Library of Munich, Germany.
    10. Simplice A. Asongu & Nicholas M. Odhiambo, 2021. "Information Asymmetry and Insurance in Africa," Journal of African Business, Taylor & Francis Journals, vol. 22(3), pages 394-410, July.
    11. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," MPRA Paper 115610, University Library of Munich, Germany.
    12. Simplice Asongu & Christelle Meniago, 2018. "Technology and persistence in global software piracy," Netnomics, Springer, vol. 19(1), pages 43-63, October.
    13. Asongu, Simplice & Odhiambo, Nicholas, 2019. "Foreign Aid Complementarities and Inclusive Human Development in Africa," MPRA Paper 101086, University Library of Munich, Germany.
    14. Simplice A. Asongu & Joseph I. Uduji & Elda N. Okolo‐Obasi, 2020. "Drivers and Persistence of Death in Conflicts: Global Evidence," World Affairs, John Wiley & Sons, vol. 183(4), pages 389-429, December.
    15. Simplice A. Asongu & Nicholas M. Odhiambo, 2023. "Foreign Direct Investment, Information Technology, And Total Factor Productivity Dynamics In Sub‐Saharan Africa," World Affairs, John Wiley & Sons, vol. 186(2), pages 469-506, June.
    16. Simplice A. Asongu & Nicholas M. Odhiambo, 2021. "Income Levels, Governance and Inclusive Human Development in Sub-Saharan Africa," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(1), pages 71-103, February.
    17. Simplice A. Asongu, 2023. "Mobile Phone Innovation and Doing Business in Sub-Saharan Africa," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 9(2), pages 238-269, July.
    18. Simplice A. Asongu, 2017. "Mobile Phone Innovation and Technology-driven Exports in Sub-Saharan Africa," Research Africa Network Working Papers 17/042, Research Africa Network (RAN).
    19. Simplice A. Asongu & Sara Le Roux & Vanessa S. Tchamyou, 2019. "Essential information sharing thresholds for reducing market power in financial access: a study of the African banking industry," Journal of Banking Regulation, Palgrave Macmillan, vol. 20(1), pages 34-50, March.
    20. Simplice A. Asongu & Ndemaze Asongu, 2019. "The Role of Mobile Phones in Governance-Driven Technology Exports in Sub-Saharan Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(2), pages 849-867, June.

    More about this item

    Keywords

    Deindustrialization; Globalization; Structural change; Productivity;
    All these keywords.

    JEL classification:

    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:59:y:2021:i:c:p:454-469. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.