American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Stages of Diversification
American Economic Review
vol. 93,
no. 1, March 2003
(pp. 63–86)
Abstract
This paper studies the evolution of sectoral concentration in relation to the level of per capita income. We show that various measures of sectoral concentration follow a U-shaped pattern across a wide variety of data sources: countries first diversify, in the sense that economic activity is spread more equally across sectors, but there exists, relatively late in the development process, a point at which they start specializing again. We discuss this finding in light of existing theories of trade and growth, which generally predict a monotonic relationship between income and diversification.Citation
Imbs, Jean, and Romain Wacziarg. 2003. "Stages of Diversification ." American Economic Review 93 (1): 63–86. DOI: 10.1257/000282803321455160JEL Classification
- F43 Economic Growth of Open Economies
- L16 Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
- D31 Personal Income, Wealth, and Their Distributions
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- O11 Macroeconomic Analyses of Economic Development