Factor Endowment, Structural Coherence, and Economic Growth

43 Pages Posted: 1 Nov 2012

Date Written: June 2012

Abstract

This paper studies the linkage between structural coherence and economic growth. Structural coherence is defined as the degree that a country's industrial structure optimally reflects its factor endowment fundamentals. The paper found that at least for the overall capital, the shares of capital intensive industries were significantly bigger with higher initial capital endowment and faster capital accumulation. Moreover, there is a positive relationship between a country's aggregate output growth and the degree of structural coherence. Quantitatively, the structural coherence with respect to the overall capital explains about 30% of the growth differential among sample countries.

Keywords: Structural Coherence, Economic Growth, Structural Change, Factor Endowment, Capital Accumulation, Industrial Structure, Production Growth, Economic Models, Economic Development, Consumption, Saving, Production, Employment, And Investment

Suggested Citation

Che, Natasha Xingyuan, Factor Endowment, Structural Coherence, and Economic Growth (June 2012). IMF Working Paper No. 12/165, Available at SSRN: https://ssrn.com/abstract=2169710

Natasha Xingyuan Che (Contact Author)

International Monetary Fund (IMF) ( email )

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

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