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Factor Endowment, Structural Coherence, and Economic Growth

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  • Ms. Natasha X Che

Abstract

This paper studies the linkage between structural coherence and economic growth. Structural coherence is defined as the degree that a country's industrial structure optimally reflects its factor endowment fundamentals. The paper found that at least for the overall capital, the shares of capital intensive industries were significantly bigger with higher initial capital endowment and faster capital accumulation. Moreover, there is a positive relationship between a country's aggregate output growth and the degree of structural coherence. Quantitatively, the structural coherence with respect to the overall capital explains about 30% of the growth differential among sample countries.

Suggested Citation

  • Ms. Natasha X Che, 2012. "Factor Endowment, Structural Coherence, and Economic Growth," IMF Working Papers 2012/165, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2012/165
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    Cited by:

    1. Yixiao Zhou, 2018. "Human capital, institutional quality and industrial upgrading: global insights from industrial data," Economic Change and Restructuring, Springer, vol. 51(1), pages 1-27, February.
    2. Tandon, Anjali, 2022. "Assessing structural coherence with factor proportions of tradable sectors in Indian economy," MPRA Paper 112779, University Library of Munich, Germany.
    3. Chao Zhou & Hongling Zheng & Shenwei Wan, 2023. "Industrial Structure, Employment Structure and Economic Growth—Evidence from China," Sustainability, MDPI, vol. 15(4), pages 1-21, February.
    4. Tandon, Anjali, 2020. "Revisiting Factor Proportions in the Indian Economy – A Study with Focus on Tradable Sectors," MPRA Paper 112773, University Library of Munich, Germany.

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