Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203389 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
ADB Economics Working Paper Series No. 549
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
This paper argues that the single most important factor that explains East Asia's development success was its fast structural transformation toward industrialization, manufacturing in particular. Workers moved out of agriculture into manufacturing, and the sector diversified and upgraded its structure. Manufacturing activities are subject to increasing returns to scale, and many manufacturing goods have high income elasticities of demand. For these reasons, manufacturing is referred to as the "engine of growth." It is in the context of industrialization that openness played an important role in East Asia's success, i.e., the connection between "export-led growth" (the relaxation of the balance-of-payments constraint on foreign exchange) and industrialization. Part 1 of the paper documents the extent of structural transformation in developing Asia. Second, it analyzes the relationship between the exportled growth model (i.e., the relaxation of the balance-of-payments constraint on foreign exchange) and industrialization. Finally, it reviews the industrialization experiences of Japan and the Republic of Korea, and discusses the recent deindustrialization debate.
Subjects: 
balance-of-payment constraint
deindustrialization
engine of growth
export-led growth
industrialization
manufacturing
structural transformation
JEL: 
O10
O14
O25
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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