Abstract
Ventura
(1997) offers an explanation for the success of the Asian Tigers in sustaining
exceptional growth rates over an extended period based on capital accumulation
alone. He points to their ability as export-oriented economies to exploit the
accumulated capital to reallocate from labor-intensive to capital-intensive
sectors instead of raising the capital intensity within each sector. We test
this argument using industry-level data on manufacturing in 33 countries over
three decades. The evidence on the argument is mixed. We identify two stages in
the evolution of the structural change in the Tigers. It was labor-intensive
initially and became capital-intensive in the 1980s. Compared to other
countries, the Tigers are exceptional in the extent of their shift from a
labor-intensive to a capital-intensive structural change during the sample
period. However, structural change in the 1980s accounted for only a negligible
part of capital accumulation in manufacturing. When tested in growth regressions
the capital-intensity of structural change does not have a significant positive
effect on growth. The effect may actually be negative.
The full article in
PDF file
To the Discussion Paper Series - Research Department page
