Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy it? A Debate Between Justin Lin and Ha‐Joon Chang

Lin, Justin Yifu; Chang, Ha‐Joon

doi:10.1111/j.1467-7679.2009.00456.x

Cited by 439 publications

(264 citation statements)

References 12 publications

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“…The fact is that Western developed countries used industrial policy since the 15th century to protect and develop the manufacturing sector. See the detailed analyses in Chang (2002) and Reinert (2007), and the debate between Lin and Chang (2009). In our view, it is impossible to understand how rich countries got rich without being aware that they heavily protected their industries when they were taking off.…”

Section: Export Sophistication and Product Diversificationmentioning

confidence: 99%

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Why Has China Succeeded - And Why it Will Continue to Do So

et al. 2010

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACTThe key factor underlying China's fast development during the last 50 years is its ability to master and accumulate new and more complex capabilities, reflected in the increase in diversification and sophistication of its export basket. This accumulation was policy induced and not the result of the market, and began before 1979. Despite its many policy mistakes, if China had not proceeded this way, in all likelihood it would be a much poorer country today. During the last 50 years, China has acquired revealed comparative advantage in the export of both labor-intensive products (following its factor abundance) and sophisticated products, although the latter does not indicate that there was leapfrogging. Analysis of China's current export opportunity set indicates that it is exceptionally well positioned (especially taking into account its income per capita) to continue learning and gaining revealed comparative advantage in the export of more sophisticated products. Given adequate policies, carefully thought-out and implemented reforms, and skillful management of constraints and risks, China has the potential to continue thriving. This does not mean, however, that high growth will continue indefinitely.

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Section: Export Sophistication and Product Diversificationmentioning

confidence: 99%

“…On this see Chang (2009). 39 Information externalities derive from the fact that searching for a new product is an activity with great social value, one that is but poorly rewarded.…”

Section: What Else Can China Export?mentioning

confidence: 99%

Why Has China Succeeded - And Why it Will Continue to Do So

et al. 2010

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“…But the debate on how to choose potential sectors is far from settled. One dimension of this debate is whether the choice of the sectors should follow or defy existing comparative advantage (Lin and Chang 2009). Another strand of the debate is whether the factor endowment model that predicts broad structure of comparative advantage (for example labour-intensive, natural resource-based products, etc.)…”

Section: Principles Of Successful Industrial Policy: Brief Review Of mentioning

confidence: 99%

The Practice of Industrial Policy

Page¹,

Tarp²

2017

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“…Economists warn about detrimental role of government's interventions in the economy. However, many scholars emphasize that none of the country have achieved economic success without reasonable government stimulus (Lin and Chang, 2009). Development economists think that the government should support industrial and technological development to develop competitive advantage (Lin and Chang, 2009).…”

Section: Introductionmentioning

confidence: 99%

“…However, many scholars emphasize that none of the country have achieved economic success without reasonable government stimulus (Lin and Chang, 2009). Development economists think that the government should support industrial and technological development to develop competitive advantage (Lin and Chang, 2009). Neo-liberals assume that it is okay for a country to skip several steps when climbing the ladder of economic development.…”

Section: Introductionmentioning

confidence: 99%

Eye for an Eye – What Markets Consider Important When Valuing Businesses

Abuashvili¹

2017

EJEF

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Attracting investment capital is important for any developing country. In case of Georgia, attracting capital from foreign markets is of utmost importance as capacity of local financial market is limited. The study provides empirical assessment of micro and macro factors that affect valuation of businesses in international markets. These factors are grouped into company characteristics (having overall importance of 68%), current standing of businesses in industry/sector and region (16% and 1% respectively) and country characteristics (15%). Two out of these four groups of factors, namely sector and region, are out of control of governments and businesses. However, they have control over factors that weight 83% in total. This empirical observation supports the notion that joint efforts of governments and businesses can influence valuation of businesses on international financial markets.

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Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy it? A Debate Between Justin Lin and Ha‐Joon Chang

Cited by 439 publications

References 12 publications

Why Has China Succeeded - And Why it Will Continue to Do So

Why Has China Succeeded - And Why it Will Continue to Do So

The Practice of Industrial Policy

Eye for an Eye – What Markets Consider Important When Valuing Businesses

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