IDEAS home Printed from https://ideas.repec.org/a/jed/journl/v44y2019i2p29-47.html
   My bibliography  Save this article

Structural Change and the Intersectoral Terms of Trade: Southeast Asian Experience

Author

Listed:
  • Richard Grabowski and Sharmistha Self

    (Southern Illinois University and University of Northern Iowa)

Abstract

In this paper it is hypothesized that premature deindustrialization is related to the intersectoral terms of trade between agriculture and manufacturing. Using a dualistic model it is shown that factors which raise the price of agricultural goods relative to manufactured goods slow the rate of structural change from agriculture to manufacturing. Data from a number of Southeast Asian countries is used to create a panel data set to test the hypothesis. Indeed a rise in the relative price of agricultural goods does indeed slow structural change and that on important factor raising this relative price ratio has been the elimination of policies which indirectly tax agriculture. The policy implication is that in order to avoid this unexpected consequence of policy reform government policy must be aimed at dramatically increasing productivity growth in agriculture.

Suggested Citation

  • Richard Grabowski and Sharmistha Self, 2019. "Structural Change and the Intersectoral Terms of Trade: Southeast Asian Experience," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 44(2), pages 29-47, June.
  • Handle: RePEc:jed:journl:v:44:y:2019:i:2:p:29-47
    as

    Download full text from publisher

    File URL: http://jed.or.kr/full-text/44-2/2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kym Anderson, 2009. "Distorted Agricultural Incentives and Economic Development: Asia's Experience," The World Economy, Wiley Blackwell, vol. 32(3), pages 351-384, March.
    2. Gollin, Douglas & Parente, Stephen L. & Rogerson, Richard, 2007. "The food problem and the evolution of international income levels," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1230-1255, May.
    3. Anderson,Kym (ed.), 2010. "The Political Economy of Agricultural Price Distortions," Cambridge Books, Cambridge University Press, number 9780521763233, October.
    4. Hsiao, Cheng & Mountain, Dean C. & Chan, M. W. Luke & Tsui, Kai Y., 1989. "Modeling Ontario regional electricity system demand using a mixed fixed and random coefficients approach," Regional Science and Urban Economics, Elsevier, vol. 19(4), pages 565-587, December.
    5. Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
    6. C. Peter Timmer, 2009. "A World Without Agriculture: The Structural Transformation in Historical Perspective," Books, American Enterprise Institute, number 43120, September.
    7. Bruton, H.J., 1998. "A Reconsideration of Import Substitution," Center for Development Economics 156, Department of Economics, Williams College.
    8. repec:aei:rpbook:24862 is not listed on IDEAS
    9. Hsiao, Cheng & Appelbe, Trent W. & Dineen, Christopher R., 1993. "A general framework for panel data models with an application to Canadian customer-dialed long distance telephone service," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 63-86, September.
    10. Henry J. Bruton, 1998. "A Reconsideration of Import Substitution," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 903-936, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mijiyawa,Abdoul Ganiou & Conde,Lancine, 2020. "Structural Change and Productivity Growth in Guinea," Policy Research Working Paper Series 9341, The World Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naudé, Wim & Tregenna, Fiona, 2023. "Africa's Industrialization Prospects: A Fresh Look," IZA Discussion Papers 16043, Institute of Labor Economics (IZA).
    2. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    3. Cohen, Joseph N., 2008. "Managing the Faustian bargain: monetary autonomy in the pursuit of development in Eastern Europe and Latin America," MPRA Paper 22435, University Library of Munich, Germany.
    4. Cornelius Hirsch & Harald Oberhofer, 2017. "Bilateral Trade Agreements and Trade Distortions in Agricultural Markets?," WIFO Working Papers 531, WIFO.
    5. Wen Li Cheng & Jeffrey Sachs & Xiaokai Yang, 2005. "An Inframarginal Analysis Of The Ricardian Model," World Scientific Book Chapters, in: An Inframarginal Approach To Trade Theory, chapter 6, pages 87-107, World Scientific Publishing Co. Pte. Ltd..
    6. Cohen, Joseph N, 2010. "Neoliberalism’s relationship with economic growth in the developing world: Was it the power of the market or the resolution of financial crisis?," MPRA Paper 24527, University Library of Munich, Germany.
    7. Cheng Hsiao, 2007. "Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 1-22, May.
    8. Inkyo Cheong & Valijon Turakulov, 2022. "How Central Asia to Escape from trade isolation?: Policy targeted scenarios by CGE modelling," The World Economy, Wiley Blackwell, vol. 45(8), pages 2622-2648, August.
    9. Cohen, Joseph N & Linton, April, 2010. "The historical relationship between inflation and political rebellion, and what it might teach us about neoliberalism," MPRA Paper 22522, University Library of Munich, Germany.
    10. Bianchi, Ana Maria, 2002. "For Different Audiences, Different Arguments: Economic Rhetoric at the Beginning of the Latin American School," Journal of the History of Economic Thought, Cambridge University Press, vol. 24(3), pages 291-305, September.
    11. Tol, Richard S.J., 2012. "A cost–benefit analysis of the EU 20/20/2020 package," Energy Policy, Elsevier, vol. 49(C), pages 288-295.
    12. N.M. Odhiambo, 2021. "Is Export-Led Growth Hypothesis Still Valid for Sub-Saharan African Countries? New Evidence from Panel Data Analysis," Working Papers AESRI-2021-02, African Economic and Social Research Institute (AESRI), revised Jan 2021.
    13. Cuervo-Cazurra, Alvaro, 2016. "Multilatinas as sources of new research insights: The learning and escape drivers of international expansion," Journal of Business Research, Elsevier, vol. 69(6), pages 1963-1972.
    14. Cuervo-Cazurra, Alvaro, 2007. "Sequence of value-added activities in the multinationalization of developing country firms," Journal of International Management, Elsevier, vol. 13(3), pages 258-277, September.
    15. Reinhardt, Nola & Peres, Wilson, 2000. "Latin America's New Economic Model: Micro Responses and Economic Restructuring," World Development, Elsevier, vol. 28(9), pages 1543-1566, September.
    16. Alvaro Cuervo-Cazurra & Luis Alfonso Dau, 2009. "Structural Reform and Firm Exports," Management International Review, Springer, vol. 49(4), pages 479-507, September.
    17. Andrey E. Shastitko & Anna I. Meleshkina & Olga A. Markova, 2021. "The market regulation triad: Antitrust, industrial policy and protectionism in the optical fiber market," Upravlenets, Ural State University of Economics, vol. 12(1), pages 47-61, March.
    18. Wen Li Cheng & Meng-Chun Liu & Xiaokai Yang, 2005. "A Ricardian Model With Endogenous Comparative Advantage And Endogenous Trade Policy Regimes," World Scientific Book Chapters, in: An Inframarginal Approach To Trade Theory, chapter 7, pages 109-130, World Scientific Publishing Co. Pte. Ltd..
    19. Mariateresa Fiocca, 2001. "Mediterraneo e Balcani: Due Aree di Crisi e di Opportunità alla periferia dell'unione Europea," ISAE Working Papers 19, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    20. Sanjaya Lall, "undated". "FDI and Development: Policy and Research Issues in the Emerging Context," QEH Working Papers qehwps43, Queen Elizabeth House, University of Oxford.

    More about this item

    Keywords

    Dualism; Intersectoral Terms of Trade; Deindustrialization; Southeast Asia;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jed:journl:v:44:y:2019:i:2:p:29-47. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sung Y. Park (email available below). General contact details of provider: https://edirc.repec.org/data/eccaukr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.