Premature deindustrialisation: the international evidence


Cambridge Journal of Economics, vol.47, no.4, pp.725-746, 2023 (SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 47 Issue: 4
  • Publication Date: 2023
  • Doi Number: 10.1093/cje/bead023
  • Journal Name: Cambridge Journal of Economics
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, International Bibliography of Social Sciences, Periodicals Index Online, ABI/INFORM, Business Source Elite, Business Source Premier, CAB Abstracts, EconLit, Geobase, Index Islamicus, PAIS International, Political Science Complete, Public Affairs Index, Sociological abstracts, Worldwide Political Science Abstracts, DIALNET
  • Page Numbers: pp.725-746
  • Keywords: Developing economies, Emerging market economies, Global value chains, Industrial policy, Premature deindustrialisation
  • Middle East Technical University Affiliated: Yes


We examine patterns and globalisation-related causes of premature deindustrialisation (PD) in recent decades, using a large panel of advanced, emerging and developing economies (AE, EME and DE). The results verify the existence of PD in EME and DE, except East Asian countries. African countries have been worst affected by PD. Globalisation-related determinants of PD vary across country groups. While trade openness leads to deindustrialisation in DE; it enhances 'dependent' industrialisation in Latin American countries and the 'factory economies' of East Asia, which have stronger linkages to global value chains. Financial openness fosters industrialisation in severely finance-constrained economies, whereas it brings about deindustrialisation in financially stronger ones. It is our contention that development possibilities can be expanded by aiming at more intense linkages to global value chains, but proactive industrial policies at the levels of EME and DE are required to achieve such expansion.