IDEAS home Printed from https://ideas.repec.org/p/fip/feddwp/99314.html
   My bibliography  Save this paper

Structural Change in Sub-Saharan Africa: An Open Economy Perspective

Author

Abstract

We study the evolution of manufacturing value added shares in 11 sub-Saharan African (SSA) countries through the lens of an open economy model of structural change. Our analysis leverages recent developments in input-output tables in SSA countries. Our model allows for income effects via non-homothetic preferences, substitution and relative price effects, as well as comparative advantage and specialization effects. We calibrate our model to include each SSA country with nine other major economies for each year between 2000 and 2018. We also do a similar set of calibrations for 11 developing Asian (DA) countries. Our main results are that domestic and foreign sectoral TFP are important drivers of structural change. Trade integration over time plays only a small role. However, trade is important as a transmission mechanism of foreign productivity trends. Finally, the drivers and mechanisms of industrialization are broadly similar in low-income SSA and DA countries.

Suggested Citation

  • Gaaitzen de Vries & Hagen Kruse & Emmanuel Mensah & Yabo Vidogbena & Kei-Mu Yi, 2024. "Structural Change in Sub-Saharan Africa: An Open Economy Perspective," Working Papers 2418, Federal Reserve Bank of Dallas.
    • Handle: RePEc:fip:feddwp:99314
    DOI: 10.24149/wp2418
    as

    Download full text from publisher

    File URL: https://www.dallasfed.org/~/media/documents/research/papers/2024/wp2418.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.24149/wp2418?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Xinshen Diao & Margaret McMillan & Dani Rodrik, 2019. "The Recent Growth Boom in Developing Economies: A Structural-Change Perspective," Springer Books, in: Machiko Nissanke & José Antonio Ocampo (ed.), The Palgrave Handbook of Development Economics, chapter 9, pages 281-334, Springer.
    2. Hagen Kruse & Emmanuel Mensah & Kunal Sen & Gaaitzen Vries, 2023. "A Manufacturing (Re)Naissance? Industrialization in the Developing World," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(2), pages 439-473, June.
    Full references (including those not matched with items on IDEAS)

    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. Erumban, Abdul A. & de Vries, Gaaitzen J., 2024. "Structural change and poverty reduction in developing economies," World Development, Elsevier, vol. 181(C).
    2. Verschoor, Aart-Jan & Gandidzanwa, Colleta & Newby, Terence & Collett, Anneliza & Venter, Sonja, 2023. "Proposing a farm assessment toolkit: evaluating a South African land reform case study," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 62(3-4), December.
    3. repec:ocp:rpecon:rp_05-24 is not listed on IDEAS
    4. Diao, Xinshen & Magalhaes, Eduardo & Silver, Jed, 2019. "Cities and rural transformation: A spatial analysis of rural livelihoods in Ghana," World Development, Elsevier, vol. 121(C), pages 141-157.
    5. Charles Shaaba Saba & Nicholas Ngepah, 2022. "ICT Diffusion, Industrialisation and Economic Growth Nexus: an International Cross-country Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2030-2069, September.
    6. Csomós, György & Szalai, Ádám & Farkas, Jenő Zsolt, 2024. "A sacrifice for the greater good? On the main drivers of excessive land take and land use change in Hungary," Land Use Policy, Elsevier, vol. 147(C).
    7. Cherif Reda & Hasanov Fuad, 2019. "Principles of True Industrial Policy," Journal of Globalization and Development, De Gruyter, vol. 10(1), pages 1-22, June.
    8. Amrita Saha & Tommaso Ciarli, 2018. "Innovation, Structural Change, and Inclusion. A Cross Country PVAR Analysis," SPRU Working Paper Series 2018-01, SPRU - Science Policy Research Unit, University of Sussex Business School.
    9. Alistair Dieppe, 2021. "Global Productivity," World Bank Publications - Books, The World Bank Group, number 34015.
    10. Ilya B. Voskoboynikov, 2020. "Structural Change, Expanding Informality and Labor Productivity Growth in Russia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(2), pages 394-417, June.
    11. repec:zbw:bofitp:2017_018 is not listed on IDEAS
    12. Emmanuel Mensah & Solomon Owusu & Neil Foster-McGregor & Adam Szirmai, 2023. "Structural Change, Productivity Growth and Labour Market Turbulence in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 32(3), pages 175-208.
    13. Hanan Morsy & Abebe Shimeles & Tiguene Nabassaga, 2023. "Structural Change and Inequality in Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 32(Supplemen), pages 228-245.
    14. Chen, Wei & Zou, Wandan & Zhong, Kaiyang & Aliyeva, Alina, 2023. "Machine learning assessment under the development of green technology innovation: A perspective of energy transition," Renewable Energy, Elsevier, vol. 214(C), pages 65-73.
    15. Gunes Asik & Michelle Marshalian & Ulas Karakoc & Mohamed Ali Marouani, 2018. "Productivity, Structural Change and Skills Dynamics in Tunisia and Turkey," Working Papers hal-04000250, HAL.
    16. Koopman, Eline & Wacker, Konstantin M., 2023. "Drivers of growth accelerations: What role for capital accumulation?," World Development, Elsevier, vol. 169(C).
    17. Cinar Baymul & Kunal Sen, 2020. "Was Kuznets Right? New Evidence on the Relationship between Structural Transformation and Inequality," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1643-1662, July.
    18. Erumban, Abdul Azeez & Das, Deb Kusum & Aggarwal, Suresh & Das, Pilu Chandra, 2019. "Structural change and economic growth in India," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 186-202.
    19. Dieppe, Alistair & Matsuoka, Hideaki, 2022. "Sectoral decomposition of convergence in labor productivity : A re-examination from a new dataset," BOFIT Discussion Papers 4/2022, Bank of Finland, Institute for Economies in Transition.
    20. Reda Cherif & Fuad Hasanov & Philippe Aghion, 2023. "Fair and inclusive markets: Why dynamism matters," Global Policy, London School of Economics and Political Science, vol. 14(5), pages 686-701, November.
    21. Dani Rodrik, 2018. "New Technologies, Global Value Chains, and Developing Economies," NBER Working Papers 25164, National Bureau of Economic Research, Inc.
    22. Michael Effah Asamoah & Imhotep Paul Alagidede, 2023. "Foreign direct investment, real sector growth and financial development," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 626-643, January.

    More about this item

    Keywords

    international trade; structural change; input-output; low-income countries;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:fip:feddwp:99314. 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: Amy Chapman (email available below). General contact details of provider: https://edirc.repec.org/data/frbdaus.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.