Structural transformation and international trade: Evidence from the China shock

Clément Nedoncelle and Julien Wolfersberger

No wp-2023-64, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: How does international trade affect structural transformation in developing countries? We use data on sectoral allocation of labour and value-added in 46 developing economies over the period 1995-2017 and exploit for identification plausibly exogenous variation in manufacturing imports from China. We find that the so-called 'China shock' largely slows down the transformation of low- and middle-income economies out of agriculture. In our main specification industrialization decreases by 0.49 per cent on average for each additional per cent of manufacturing imports from China.

Keywords: Developing countries; Industrialization; Structural transformation; Trade (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-cna, nep-dev, nep-int and nep-tid
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Citations: View citations in EconPapers (2)

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