Structural Transformation and the Sophistication of Production

51 Pages Posted: 25 Mar 2012

See all articles by Rahul Anand

Rahul Anand

International Monetary Fund (IMF)

Saurabh Mishra

International Monetary Fund (IMF)

Nicola Spatafora

International Monetary Fund (IMF)

Date Written: February 2012

Abstract

A new dataset on export sophistication reveals that in many countries the importance of modern services, and the sophistication of manufactured and service exports, has increased over time. However, this trend was less pronounced in LICs. Sophisticated sectors are more likely to act as a catalyst for broad-based economic growth, rather than turning into isolated enclaves, when the economy is liberalized, the exchange rate is not overvalued, and there are good information flows. An educated workforce, external liberalization, and good information flows are important prerequisites for developing sophisticated goods and services. An appropriate macroeconomic policy is particularly important for goods, skilled labor and good information flows for services.

Keywords: Structural Transformation, Sophistication Of Production, Service Exports, Economic Growth, Low-income Developing Countries, Manufacturing Sector, Productivity, Services Sector

JEL Classification: F43, O14, O47

Suggested Citation

Anand, Rahul and Mishra, Saurabh and Spatafora, Nikola, Structural Transformation and the Sophistication of Production (February 2012). IMF Working Paper No. NO.12/59. Available at SSRN: https://ssrn.com/abstract=2028235

Rahul Anand

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Saurabh Mishra (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Nikola Spatafora

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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