Industrial Structure, Appropriate Technology and Economic Growth in Less Developed Countries

32 Pages Posted: 20 Apr 2016

See all articles by Justin Y. Lin

Justin Y. Lin

Peking University - China Center for Economic Research

Pengfei Richar Zhang

Peking University - China Center for Economic Research (CCER)

Date Written: April 1, 2009

Abstract

The authors develop an endogenous growth model that combines structural change with repeated product improvement. That is, the technologies in one sector of the model become not only increasingly capital-intensive, but also progressively productive over time. Application of the basic model to less developed economies shows that the (optimal) industrial structure and the (most) appropriate technologies in less developed economies are endogenously determined by their factor endowments. A firm in a less developed country that enters a capital-intensive, advanced industry in a developed country would be nonviable owing to the relative scarcity of capital in the factor endowments of less developed countries.

Keywords: Economic Theory & Research, Political Economy, Technology Industry, Economic Growth, Inequality

Suggested Citation

Lin, Justin Yifu and Zhang, Pengfei Richar, Industrial Structure, Appropriate Technology and Economic Growth in Less Developed Countries (April 1, 2009). World Bank Policy Research Working Paper No. 4905, Available at SSRN: https://ssrn.com/abstract=1401211

Justin Yifu Lin (Contact Author)

Peking University - China Center for Economic Research ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Pengfei Richar Zhang

Peking University - China Center for Economic Research (CCER) ( email )

Beijing, Beijing 100871
China

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