CFDP 2253

Heterogeneous Paths of Industrialization


Publication Date: August 2020

Update Date: April 2022

Pages: 45


Industrialization experiences differ substantially across countries. We use a
benchmark model of structural change to shed light on the sources of this heterogeneity
and, in particular, the phenomenon of premature deindustrialization. Our
analysis leads to three key findings. First, benchmark models of structural change
robustly generate hump-shaped patterns for the evolution of the industrial sector.
Second, heterogeneous patterns of catch-up in sectoral productivities across countries
can generate variation in industrialization experiences similar to those found
in the data, including premature deindustrialization. Third, differences in the rate
of agricultural productivity growth across economies can account for the majority
of the variation in peak industrial employment shares.

Keywords: Structural transformation, Productivity growth, Industrialization

JEL Classification Codes: E24, O11, O13, O14, O33, O41

JEL Classification Codes: E24O11O13O14O33O41