Determinants of Industrial Development

Fiona Tregenna, Kevin Nell, Chris Callaghan

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

2 Citations (Scopus)


Global evidence suggests that, for many countries, manufacturing typically has an inverted U-shaped relationship with development. But unlike the historical experience of most developed countries, for most developing countries the turning point of this relationship is occurring sooner in the development process, and at substantially lower levels of income. This is termed ‘premature deindustrialization’. The consequences of this may be particularly important if such countries can no longer rely on manufacturing-led development. Why are some countries more industrialized, or more deindustrialized, than other comparable countries? To explore these issues, this chapter uses panel-data econometric techniques to analyse the determinants of the share of manufacturing in GDP, across countries and across time. Domestic determinants include investment, government consumption, population size, human capital, democracy, and natural resource endowments. External determinants include trade openness, capital account liberalization, and exchange rate depreciation.

Original languageEnglish
Title of host publicationNew Perspectives on Structural Change
Subtitle of host publicationCauses and Consequences of Structural Change in the Global Economy
PublisherOxford University Press
Number of pages29
ISBN (Electronic)9780198850113
Publication statusPublished - 1 Jan 2021


  • Exchange rate
  • Human capital
  • Industrial development
  • Inverted U-curve
  • Investment
  • Premature deindustrialization
  • Trade openness

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (all)
  • General Business,Management and Accounting


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