Stages of diversification

Jean Imbs, Romain Wacziarg

Research output: Contribution to journalReview articlepeer-review

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.

Original languageEnglish (US)
Pages (from-to)63-86
Number of pages24
JournalAmerican Economic Review
Volume93
Issue number1
DOIs
StatePublished - Mar 2003

ASJC Scopus subject areas

  • Economics and Econometrics

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