Dr. Francesca Guadagno

Why have so few countries industrialised?

Year: 2015

Bart Verspagen & Adam Szirmai

Since the Industrial Revolution, industrialisation proved to be an engine of development. Virtually all countries of the world have tried to industrialise. While few succeeded, most of them did not. This thesis tries to understand why some countries industrialised, and some others did not. The thesis is composed of empirical studies, combining macroeconomic and microeconomic perspectives, quantitative and qualitative approaches. The thesis shows that faster industrialisation occurs in countries with relatively underdeveloped manufacturing sectors, large domestic markets, strong export performances, and undervalued exchange rates. While labour costs are rarely significant determinants of industrialisation, innovative efforts matter, especially since the 1990s. The second part of the thesis deals with the role of industrial policies for industrialisation. A quantification of industrial policy in Argentina, Brazil, Mexico, South Korea, and Taiwan shows how disbursements for industrial policy instruments differed in both size and nature. The last part of the thesis focuses on the role of macroeconomic policies for industrialisation. It shows that firms’ investment behaviours follow business cycles’ fluctuations. By influencing these fluctuations, macroeconomic policies prove to be significant determinants of firms’ investments.