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This study aims to examine the premature deindustrialization risk in Vietnam.
Abstract
Purpose
This study aims to examine the premature deindustrialization risk in Vietnam.
Design/methodology/approach
This study uses a manufacturing–income relationship to conduct an empirical estimation. The latecomer index is adopted in the regression model to identify a downward shift of latecomer's relationship.
Findings
The empirical analysis indicates that there is a risk of premature deindustrialization in the Northern Midlands and Mountain Areas. The provinces with low trade openness or foreign direct investment may experience risk of premature deindustrialization.
Practical implications
This study proposes technology diffusion as a policy direction to prevent premature deindustrialization. Furthermore, the Vietnamese government should improve the business environment in the Northern Midlands and Mountain Areas by promoting and attracting export-oriented foreign direct investment.
Originality/value
This study is the first to examine premature deindustrialization in Vietnam based on provincial-level data.
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This study aims to examine the effects of industrialization, deindustrialization and financialization on Turkey’s energy insecurity by controlling the impacts of urbanization and…
Abstract
Purpose
This study aims to examine the effects of industrialization, deindustrialization and financialization on Turkey’s energy insecurity by controlling the impacts of urbanization and alternative energy generation for the 1980–2018 period.
Design/methodology/approach
This study proposed an econometric model relying on the literature. Moreover, based on different financialization variables, this study estimated two specifications of this model using the augmented nonlinear autoregressive distributed lag approach.
Findings
The results are as follows: first, industrialization increased Turkey’s long-run energy insecurity, whereas deindustrialization did not affect Turkey’s energy security. Second, urbanization worsened Turkey’s energy insecurity. Third, financialization aggravated Turkey’s energy insecurity. Last, alternative energy generation improved Turkey’s energy security.
Research limitations/implications
This study identifies the energy security’s drivers in Turkey with a focus on industrialization and financialization. Nonetheless, further research is needed on other emerging economies with high energy insecurity levels, and a disaggregated approach can be followed to examine how various industrial sectors impact energy security.
Practical implications
To combat energy insecurity, quantifiable, innovative and energy-efficient goals should be set for Turkey’s industry sector. Additionally, to achieve these goals, financial opportunities should be provided by reforming the financial sector. This reformative approach can also curb financialization’s negative effect on Turkey’s energy security.
Social implications
Deindustrialization is not a solution to Turkey’s energy insecurity. Also, unless necessary actions are taken, industrialization, financialization and uncontrolled urbanization may continue to threaten Turkey’s energy security. Finally, promoting alternative energy generation seems to be a viable long-run solution to energy insecurity.
Originality/value
Although a significant number of studies investigated industrialization’s and financialization’s impacts on energy demand or environmental damage, only a few studies examined their impacts on energy insecurity. Similar to other developing nations, as Turkey is facing chronic energy security problems, the author believes that the analysis provides important policy insights regarding energy (in)security’s drivers. By differentiating the impacts of industrialization and deindustrialization, this study also shows that deindustrialization may not be a proper solution to deal with energy insecurity.
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Christos Pitelis and Nicholas Antonakis
Despite long‐standing debates on deindustrialisation and the importance of manufacturing, as well as tests of the deindustrialisation hypothesis, little empirical work exists on…
Abstract
Despite long‐standing debates on deindustrialisation and the importance of manufacturing, as well as tests of the deindustrialisation hypothesis, little empirical work exists on the impact of manufacturing on competitiveness, where manufacturing is the independent variable. To address this first presents a conceptual framework that links manufacturing to competitiveness and deindustrialisation and tests it for a case of serious apparent deindustrialisation and “relative decline”, that of Greece, in the context of a novel “simultaneous equation model” that tests both for deindustrialisation and “manufacturing matters”. Finds that the change in manufacturing shares have a positive and significant impact on competitiveness measured by per capita income, confirming that “manufacturing matters”.
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The purpose of the paper is to determine why premature deindustrialization is occurring in many developing countries.
Abstract
Purpose
The purpose of the paper is to determine why premature deindustrialization is occurring in many developing countries.
Design/methodology/approach
A theoretical structure for explaining premature deindustrialization is utilized. Then the comparative experiences of a number of developing countries are used to illustrate the operation of the theory.
Findings
The results indicate that increasing inequality among a number of developing countries has reduced the domestic market for labor intensive manufactured goods, resulting in stagnation in manufacturing. Also, the increasing inequality in developed countries has reduced international demand for labor intensive manufacturing. Thus developing countries have fewer opportunities to export labor intensive manufacturing.
Research limitations/implications
Data on inequality is limited and it is very difficult to determine causality. However, intuition indicates that causality is most likely bi-directional.
Practical implications
Strategies of economic development must concern themselves with the effects that increasing inequality will likely have on the development of labor intensive manufacturing.
Social implications
Social programs that bolster the purchasing power of poor families are likely to be important (social safety net). Broad-based agricultural growth will provide a basis for labor intensive manufacturing.
Originality/value
The originality stems from the linking of deindustrialization with rising inequality.
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Dmitry Shevchenko, Weili Zhao and Qiyang Guo
The purpose of this study is to probe into the influence mechanism of financial opening onto industrial restructuring from the prism of financial development and examine the role…
Abstract
Purpose
The purpose of this study is to probe into the influence mechanism of financial opening onto industrial restructuring from the prism of financial development and examine the role of the credit market, capital market and currency market in transmitting the impact of financial opening onto industrial restructuring in both developed countries and developing countries.
Design/methodology/approach
In the theoretical model, the indicator of financial opening was introduced in Cobb–Douglas production function formula. Using constant elasticity of substitution utility function, based on Engel’s law, the optimal industrial structure in the economy was concluded. For the empirical analysis, data was collected from 36 developed countries and 34 developing countries during the period 2000 to 2019. Multiple mediator models with bootstrap techniques were used to identify the linkage between financial opening, financial development and industrial restructuring.
Findings
First, there is a U-shaped relationship between financial opening and industrial restructuring. Second, financial development plays a mediating role in transmitting the effects of financial opening onto industrial restructuring mainly through the credit market at the global level. Third, developed countries are in a trend of “reindustrialization,” while developing countries show a trend of “premature deindustrialization.” Moreover, for developed countries, the capital market leads to reindustrialization, while the credit market and currency market contribute to deindustrialization. For developing countries, the capital market and credit market lead to deindustrialization, while the currency market contributes to industrialization.
Originality/value
Unlike most previous researches, this paper focuses on examining three-variable relationship between financial opening, financial development and domestic industrial restructuring. Against the backdrop of the pandemic, monetary policy shifts of developed economies have led to an increase in cross-border capital flows, which will lead to the increasing risks for international financial markets and the reallocation of the global value chain. It is of great significance to clarify the linkage between these three variables in the face of a volatile international financial environment.
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Valentina Bonello, Claudia Faraone, Francesca Gambarotto, Luca Nicoletto and Giulio Pedrini
This paper aims to provide a comprehensive vision of the formation of intra-metropolitan clusters triggered by the deindustrialization of an urban area, namely, the district of…
Abstract
Purpose
This paper aims to provide a comprehensive vision of the formation of intra-metropolitan clusters triggered by the deindustrialization of an urban area, namely, the district of Porto Marghera in the metropolitan area of Venice and propose possible regeneration scenarios based on intra-metropolitan clustering.
Design/methodology/approach
This paper adopts a multi-disciplinary approach and relies on both descriptive and qualitative evidence to show the economic transition occurred in the area of Porto Marghera in recent years.
Findings
Evidence shows the rise of two potential clusters in the KIBS and the creative industries in a well-delimited fringe area placed at the boundary between the urban centre and the core of the deindustrialized zone. Such clustering processes have been, however, characterized by two different and in some way alternative paths. The former stems from the combination of two autonomous entrepreneurial ideas that complemented one to each other. The latter relies on university-industry collaboration and on the presence of places of informal exchanges that proved to support personal networking, knowledge exchange and business opportunities.
Research limitations/implications
This paper suggests that local development policies could leverage on the presence of social entrepreneurs to substitute the creation of amenities and the provision of public goods in fragile territories.
Originality/value
This paper shows that, in presence of specific spatial conditions, deindustrialization can stimulate the formation of new intra-metropolitan through both top-down and bottom-up agglomeration process.
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E. Kwan Choi and Jai-Young Choi
Purpose – This chapter investigates the role of infrastructure aid to developing countries for determining the effect on national income and consumer welfare. The chapter further…
Abstract
Purpose – This chapter investigates the role of infrastructure aid to developing countries for determining the effect on national income and consumer welfare. The chapter further demonstrates the conditions for the Dutch disease effect by decomposing the output effects of infrastructure aid into the initial factor-saving effect, factor-substitution effect and nontraded good effect.
Methodology/approach – This chapter extends the Heckscher−Ohlin model to a 3×2 case with two traded goods and a nontraded good, and derives comparative static results on factor prices, the price of nontraded goods, foreign exchange rate, sectoral outputs, and national income and consumer welfare.
Findings – It is shown that for a recipient country, infrastructure aid to either the export or import sector necessarily raises national income and consumer welfare, whereas the same aid to the nontraded good sector does not affect national income but raises consumer welfare. Infrastructure aid may lead to a Dutch disease effect via its three effects on industrial outputs: the initial factor-saving effect, factor-substitution effect and nontraded good effect.
Research limitations/implications – This chapter considers infrastructure capital as a public input, but it is devoid of analysis of inter-industrial spillover effects that the infrastructure capital generates to other sectors.
Practical implications – This chapter reveals several aspects of infrastructure aid that the practitioners of aids must consider.
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Pedro Gomes Vasconcelos and Nelson Leitão Paes
In an attempt to reduce tax distortions and increase economic efficiency, in 2002 and 2003 Brazil promoted changes in the PIS/COFINS tax, the main federal tax on consumption…
Abstract
Purpose
In an attempt to reduce tax distortions and increase economic efficiency, in 2002 and 2003 Brazil promoted changes in the PIS/COFINS tax, the main federal tax on consumption. Thus, in addition to the old cumulative regime calculated on company revenues, the noncumulative regime was created with higher rates and the added value as a tax basis.
Design/methodology/approach
This paper analyzes the effects of the PIS/COFINS reform in a context of deindustrialization in the Brazilian economy, using a neoclassical model with two sectors.
Findings
The results suggest that after a small improvement in the aggregate economy in the short term, in the long term there was a worsening of the macroeconomic indicators. From the sector perspective, the PIS/COFINS reform may have contributed to the loss of industry participation in the Brazilian economy.
Originality/value
The study of the impact of the PIS/COFINS reform on industry through a neoclassical model is unprecedented in the national literature and contributes to the investigation of changes in the tax regime that occurred in the country.
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Jai-Young Choi and E. Kwan Choi
This paper investigates the role of infrastructure aid to developing countries beset with unemployment. Since unemployment persists in most developing countries with chronic…
Abstract
This paper investigates the role of infrastructure aid to developing countries beset with unemployment. Since unemployment persists in most developing countries with chronic foreign debts, the impact of infrastructure aid is analyzed using an extended Harris–Todaro model with two traded good sectors and a nontraded good sector. The paper delineates sufficient conditions under which infrastructure aid may lead to a Dutch disease effect.
Michael Wallace and Joonghyun Kwak
Using a sample of 214 US metropolitan areas, we examine the connection between the Great Recession and bad jobs, taking into consideration the macro-level determinants of the…
Abstract
Using a sample of 214 US metropolitan areas, we examine the connection between the Great Recession and bad jobs, taking into consideration the macro-level determinants of the troubled economy. Our measure of bad jobs is derived from Kalleberg, Reskin, and Hudson’s (2000) conceptualization as those that have low pay, lack health insurance, and lack pension plans. We find that the Great Recession increased the prevalence of bad jobs, consistently for men and selectively for women. Among the macro-level processes, the decline of the manufacturing base, union membership, and public sector employment are sources of increasing bad jobs, especially for men. Those macro-level processes which are growing in influence such as casualization, globalization and financialization show no signs of reversing the negative trends in bad jobs. Human capital variables in the labor market such as educational and age variability consistently suggest more adverse effects on bad jobs for men than women. Our findings contribute to the further understanding of the nature of precarious work in a troubled economy.
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