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