Manufacturing and economic growth in developing countries, 1950–2005

Published Date
Structural Change and Economic Dynamics
September 2015, Vol.34:46–59, doi:10.1016/j.strueco.2015.06.002

Author 

• Adam Szirmai ^a,,
• Bart Verspagen ^a,b,

• aMaastricht Economic and Social Research and Training Centre on Innovation and Technology, United Nations University (UNU-MERIT), Maastricht, The Netherlands
• bSchool of Business and Economics, Maastricht University, Maastricht, The Netherlands

Received October 2013. Revised June 2015. Accepted June 2015. Available online 8 July 2015. 

Highlights

• •
  We re-examine the role of manufacturing as a driver of growth in developed and developing countries in the period 1950–2005.
• •
  We find a moderate positive impact of manufacturing on growth and interesting interaction effects of manufacturing with education and income gaps.
• •
  Manufacturing is becoming a more difficult route to growth than before after 1990.

Abstract

Historically, manufacturing has functioned as the main engine of economic growth and development. However, recent research raises questions concerning the continued importance of the manufacturing sector for economic development. We re-examine the role of manufacturing as a driver of growth in developed and developing countries in the period 1950–2005. We find a moderate positive impact of manufacturing on growth. We also find interesting interaction effects of manufacturing with education and income gaps. In a comparison of the subperiods, it seems that since 1990, manufacturing is becoming a more difficult route to growth than before.

Keywords

Economic growth

Development

Industrialisation

Manufacturing sector

JEL classification

O10

O14

O40

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  Corresponding author at: UNU-MERIT, PO Box 616, NL-6200MD Maastricht, The Netherlands. Tel.: +31 43 3884469.

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