Public Policy and Industrial Transformation in the Process of Development
This paper studies the role of public policy in promoting industrial transformation from an imitationbased, low-skill economy to an innovation-based, high-skill economy, where technological progress now occurs through the domestic invention of idea...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/04/17558108/public-policy-industrial-transformation-process-development http://hdl.handle.net/10986/14443 |
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okr-10986-14443 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ACCESS TO BANK ACCESS TO BANK LOANS ACCOUNTING ADJUSTMENT PROCESS ADVERSE EFFECT AGRICULTURE ALLOCATION ARBITRAGE ASSET PRICE BANK LOANS BENCHMARK BINDING CONSTRAINT BONDS BUDGET CONSTRAINT BUSINESS CYCLE CAPITAL FORMATION CAPITAL GAIN CAPITAL STOCKS CENTRAL BANK COLLATERAL COMMODITY PRICES COMPETITIVENESS CONSTANT RETURNS TO SCALE CONSUMER EXPENDITURE CONSUMPTION EXPENDITURE DEADWEIGHT DEADWEIGHT LOSS DEFICIT FINANCING DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISCOUNT RATE DISCOUNTED VALUE EARNING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIES OF SCALE ELASTICITY OF SUBSTITUTION EMPLOYMENT ENTRY COST EQUILIBRIUM EQUIPMENT EXOGENOUS RATE EXPORT MARKET EXPORTS EXTERNAL FINANCE EXTERNALITIES EXTERNALITY FINANCIAL SECTOR FINANCIAL SUPPORT FIRM GROWTH FIRM LEVEL FIRM PERFORMANCE FIRM SIZE FISCAL POLICY FIXED CAPITAL FORMAL ANALYSIS GDP GLOBALIZATION GOVERNMENT INVESTMENT GOVERNMENT REVENUES GOVERNMENT SPENDING GROWTH RATE HOLDING HUMAN CAPITAL INCOME INCOME DISTRIBUTION INCOME GROWTH INDUSTRIALIZATION INEXPERIENCED WORKERS INFORMAL ECONOMY INFORMATION ASYMMETRIES INNOVATION INNOVATIONS INTELLECTUAL PROPERTY INTEREST RATE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL MARKETS INVESTING INVESTMENT FLOWS INVESTMENT RATE JOBS LABOR COST LABOR COST ADVANTAGE LABOR DEMAND LABOR FORCE LABOR MARKET LABOR MARKETS LABOR PRODUCTIVITY LABOR SUPPLY LACK OF CREDIT LEGAL CONSTRAINTS LEVIES LIVING STANDARDS LOCAL FIRMS LONG-RUN EFFECTS MACROECONOMICS MANUFACTURING INDUSTRIES MARGINAL BENEFITS MARGINAL COST MARGINAL PRODUCT MARGINAL REVENUE MARKET CONDITIONS MARKET INTEREST RATE MARKET SHARE MAXIMUM LIKELIHOOD ESTIMATION MONETARY FUND NATURAL RESOURCES OPEN ECONOMY OPPORTUNITY COST OPTIMIZATION PATENTS POLITICAL ECONOMY POSITIVE EXTERNALITY PREVIOUS SECTION PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE INVESTMENT PRODUCT INNOVATION PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GAINS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES PROPERTY RIGHTS PUBLIC INVESTMENT PUBLIC SECTOR PUBLIC SPENDING RATE OF RETURN RENTS RURAL WORKERS SCALE EFFECTS SHARE OF INVESTMENT SKILL PREMIUM SKILL REQUIREMENTS SKILLED WORKERS STOCKS TAX TAX RATE TAX REVENUES TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TRAINING COST TRAINING COSTS TRAINING PERIOD UNSKILLED LABOR UNSKILLED WORKER UNSKILLED WORKERS UTILITY FUNCTION VALUE ADDED VOCATIONAL TRAINING VOCATIONAL TRAINING PROGRAMS WAGE INCREASES WAGE RATE WAGES |
| spellingShingle |
ACCESS TO BANK ACCESS TO BANK LOANS ACCOUNTING ADJUSTMENT PROCESS ADVERSE EFFECT AGRICULTURE ALLOCATION ARBITRAGE ASSET PRICE BANK LOANS BENCHMARK BINDING CONSTRAINT BONDS BUDGET CONSTRAINT BUSINESS CYCLE CAPITAL FORMATION CAPITAL GAIN CAPITAL STOCKS CENTRAL BANK COLLATERAL COMMODITY PRICES COMPETITIVENESS CONSTANT RETURNS TO SCALE CONSUMER EXPENDITURE CONSUMPTION EXPENDITURE DEADWEIGHT DEADWEIGHT LOSS DEFICIT FINANCING DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISCOUNT RATE DISCOUNTED VALUE EARNING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIES OF SCALE ELASTICITY OF SUBSTITUTION EMPLOYMENT ENTRY COST EQUILIBRIUM EQUIPMENT EXOGENOUS RATE EXPORT MARKET EXPORTS EXTERNAL FINANCE EXTERNALITIES EXTERNALITY FINANCIAL SECTOR FINANCIAL SUPPORT FIRM GROWTH FIRM LEVEL FIRM PERFORMANCE FIRM SIZE FISCAL POLICY FIXED CAPITAL FORMAL ANALYSIS GDP GLOBALIZATION GOVERNMENT INVESTMENT GOVERNMENT REVENUES GOVERNMENT SPENDING GROWTH RATE HOLDING HUMAN CAPITAL INCOME INCOME DISTRIBUTION INCOME GROWTH INDUSTRIALIZATION INEXPERIENCED WORKERS INFORMAL ECONOMY INFORMATION ASYMMETRIES INNOVATION INNOVATIONS INTELLECTUAL PROPERTY INTEREST RATE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL MARKETS INVESTING INVESTMENT FLOWS INVESTMENT RATE JOBS LABOR COST LABOR COST ADVANTAGE LABOR DEMAND LABOR FORCE LABOR MARKET LABOR MARKETS LABOR PRODUCTIVITY LABOR SUPPLY LACK OF CREDIT LEGAL CONSTRAINTS LEVIES LIVING STANDARDS LOCAL FIRMS LONG-RUN EFFECTS MACROECONOMICS MANUFACTURING INDUSTRIES MARGINAL BENEFITS MARGINAL COST MARGINAL PRODUCT MARGINAL REVENUE MARKET CONDITIONS MARKET INTEREST RATE MARKET SHARE MAXIMUM LIKELIHOOD ESTIMATION MONETARY FUND NATURAL RESOURCES OPEN ECONOMY OPPORTUNITY COST OPTIMIZATION PATENTS POLITICAL ECONOMY POSITIVE EXTERNALITY PREVIOUS SECTION PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE INVESTMENT PRODUCT INNOVATION PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GAINS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES PROPERTY RIGHTS PUBLIC INVESTMENT PUBLIC SECTOR PUBLIC SPENDING RATE OF RETURN RENTS RURAL WORKERS SCALE EFFECTS SHARE OF INVESTMENT SKILL PREMIUM SKILL REQUIREMENTS SKILLED WORKERS STOCKS TAX TAX RATE TAX REVENUES TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TRAINING COST TRAINING COSTS TRAINING PERIOD UNSKILLED LABOR UNSKILLED WORKER UNSKILLED WORKERS UTILITY FUNCTION VALUE ADDED VOCATIONAL TRAINING VOCATIONAL TRAINING PROGRAMS WAGE INCREASES WAGE RATE WAGES Agenor, Pierre-Richard Dinh, Hinh T. Public Policy and Industrial Transformation in the Process of Development |
| relation |
Policy Research Working Paper;No.6405 |
| description |
This paper studies the role of public
policy in promoting industrial transformation from an
imitationbased, low-skill economy to an innovation-based,
high-skill economy, where technological progress now occurs
through the domestic invention of ideas. Industrial
transformation is measured by changes in an index of
industrial structure, defined as the ratio of the variety of
imitation- to innovation-based intermediate goods. A key
mechanism through which productivity increases initially in
both the imitation and innovation sectors is through a
knowledge externality associated with learning by doing in
the imitation sector. The process of industrialization
increases the demand for high-skill labor, inducing
individuals to invest in education. The model also
emphasizes the distinction between basic or core
infrastructure, which promotes imitation, and advanced
infrastructure, which promotes innovation. A calibrated
version for a low-income country is used to perform several
policy experiments, including an increase in investment in
infrastructure, a reduction in the cost of training, and
improved enforcement of property rights. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Agenor, Pierre-Richard Dinh, Hinh T. |
| author_facet |
Agenor, Pierre-Richard Dinh, Hinh T. |
| author_sort |
Agenor, Pierre-Richard |
| title |
Public Policy and Industrial Transformation in the Process of Development |
| title_short |
Public Policy and Industrial Transformation in the Process of Development |
| title_full |
Public Policy and Industrial Transformation in the Process of Development |
| title_fullStr |
Public Policy and Industrial Transformation in the Process of Development |
| title_full_unstemmed |
Public Policy and Industrial Transformation in the Process of Development |
| title_sort |
public policy and industrial transformation in the process of development |
| publisher |
World Bank, Washington, D.C. |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/04/17558108/public-policy-industrial-transformation-process-development http://hdl.handle.net/10986/14443 |
| _version_ |
1764429319951613952 |
| spelling |
okr-10986-144432021-04-23T14:03:19Z Public Policy and Industrial Transformation in the Process of Development Agenor, Pierre-Richard Dinh, Hinh T. ACCESS TO BANK ACCESS TO BANK LOANS ACCOUNTING ADJUSTMENT PROCESS ADVERSE EFFECT AGRICULTURE ALLOCATION ARBITRAGE ASSET PRICE BANK LOANS BENCHMARK BINDING CONSTRAINT BONDS BUDGET CONSTRAINT BUSINESS CYCLE CAPITAL FORMATION CAPITAL GAIN CAPITAL STOCKS CENTRAL BANK COLLATERAL COMMODITY PRICES COMPETITIVENESS CONSTANT RETURNS TO SCALE CONSUMER EXPENDITURE CONSUMPTION EXPENDITURE DEADWEIGHT DEADWEIGHT LOSS DEFICIT FINANCING DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISCOUNT RATE DISCOUNTED VALUE EARNING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIES OF SCALE ELASTICITY OF SUBSTITUTION EMPLOYMENT ENTRY COST EQUILIBRIUM EQUIPMENT EXOGENOUS RATE EXPORT MARKET EXPORTS EXTERNAL FINANCE EXTERNALITIES EXTERNALITY FINANCIAL SECTOR FINANCIAL SUPPORT FIRM GROWTH FIRM LEVEL FIRM PERFORMANCE FIRM SIZE FISCAL POLICY FIXED CAPITAL FORMAL ANALYSIS GDP GLOBALIZATION GOVERNMENT INVESTMENT GOVERNMENT REVENUES GOVERNMENT SPENDING GROWTH RATE HOLDING HUMAN CAPITAL INCOME INCOME DISTRIBUTION INCOME GROWTH INDUSTRIALIZATION INEXPERIENCED WORKERS INFORMAL ECONOMY INFORMATION ASYMMETRIES INNOVATION INNOVATIONS INTELLECTUAL PROPERTY INTEREST RATE INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL MARKETS INVESTING INVESTMENT FLOWS INVESTMENT RATE JOBS LABOR COST LABOR COST ADVANTAGE LABOR DEMAND LABOR FORCE LABOR MARKET LABOR MARKETS LABOR PRODUCTIVITY LABOR SUPPLY LACK OF CREDIT LEGAL CONSTRAINTS LEVIES LIVING STANDARDS LOCAL FIRMS LONG-RUN EFFECTS MACROECONOMICS MANUFACTURING INDUSTRIES MARGINAL BENEFITS MARGINAL COST MARGINAL PRODUCT MARGINAL REVENUE MARKET CONDITIONS MARKET INTEREST RATE MARKET SHARE MAXIMUM LIKELIHOOD ESTIMATION MONETARY FUND NATURAL RESOURCES OPEN ECONOMY OPPORTUNITY COST OPTIMIZATION PATENTS POLITICAL ECONOMY POSITIVE EXTERNALITY PREVIOUS SECTION PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE INVESTMENT PRODUCT INNOVATION PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GAINS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES PROPERTY RIGHTS PUBLIC INVESTMENT PUBLIC SECTOR PUBLIC SPENDING RATE OF RETURN RENTS RURAL WORKERS SCALE EFFECTS SHARE OF INVESTMENT SKILL PREMIUM SKILL REQUIREMENTS SKILLED WORKERS STOCKS TAX TAX RATE TAX REVENUES TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TRAINING COST TRAINING COSTS TRAINING PERIOD UNSKILLED LABOR UNSKILLED WORKER UNSKILLED WORKERS UTILITY FUNCTION VALUE ADDED VOCATIONAL TRAINING VOCATIONAL TRAINING PROGRAMS WAGE INCREASES WAGE RATE WAGES This paper studies the role of public policy in promoting industrial transformation from an imitationbased, low-skill economy to an innovation-based, high-skill economy, where technological progress now occurs through the domestic invention of ideas. Industrial transformation is measured by changes in an index of industrial structure, defined as the ratio of the variety of imitation- to innovation-based intermediate goods. A key mechanism through which productivity increases initially in both the imitation and innovation sectors is through a knowledge externality associated with learning by doing in the imitation sector. The process of industrialization increases the demand for high-skill labor, inducing individuals to invest in education. The model also emphasizes the distinction between basic or core infrastructure, which promotes imitation, and advanced infrastructure, which promotes innovation. A calibrated version for a low-income country is used to perform several policy experiments, including an increase in investment in infrastructure, a reduction in the cost of training, and improved enforcement of property rights. 2013-07-10T17:20:52Z 2013-07-10T17:20:52Z 2013-04 http://documents.worldbank.org/curated/en/2013/04/17558108/public-policy-industrial-transformation-process-development http://hdl.handle.net/10986/14443 English en_US Policy Research Working Paper;No.6405 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research |