Premature deindustrialization in post-Soviet economies

Taguchi, Hiroyuki and Elbek, Abdullaev (2022): Premature deindustrialization in post-Soviet economies.

Abstract

This article aims to examine the deindustrialization in the post-Soviet economies from the perspective of the premature deindustrialization hypothesis, and also to investigate the factors that cause the deindustrialization: a comparative advantage in manufacturing, the Dutch Disease factor, human capital and institutions. This study takes the following two steps: first, to show the degree of the deindustrialization by their country-specific fixed effect in the estimation of manufacturing-population-income relationships, and second, to reveal the contributions of the deindustrialization factors to the country-specific fixed effect. The main findings from the empirical estimations are summarized as follows. First, the result of the fixed-effect model estimation suggested the existence of the deindustrialization in the ten middle-income countries out of the total 15 post-Soviet countries. Second, the outcomes of the factor-analyses revealed that the deindustrialization in the ten countries is fully explained by their comparative disadvantages in manufacturing as the overall contributor, and further by the sub-factors: the lack of human capital, the Dutch Disease effect (mainly in Azerbaijan, Kazakhstan, Russian Federation, and Uzbekistan) and immature institutions (mainly in Kyrgyz, Tajikistan, Ukraine, and Uzbekistan).

• Item Type: MPRA Paper
• Language: English
• Keywords: Deindustrialization, Post-Soviet economies, Dutch Disease, Human capital, Institutions, and Manufacturing
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries

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