The patterns of deindustrialization in Tunisia, Morocco, and Egypt Figures 1 to 6 present the evolution of the shares of industry/manufacturing in GDP and employment in Tunisia, Morocco, and Egypt. [...] The share of manufacturing in GDP dropped from around 20 percent in the late 1990s to around 16 percent in the end of the observed period (2018) in Morocco and Egypt and 14 percent in Tunisia. [...] In the same vein, the decline in the weight of industry as a whole began earlier, specifically in the late 1980s, driven by the shrinkage of the non-manufacturing sector and the depletion of natural resources. [...] 12 In comparison to the past literature on the relationship between growth and the weight of manufacturing, recent findings point out the declining impact of the latter and the increase in services role, especially modern and high value-added activities. [...] The results reveal that the majority of series are clearly stationary, with the exception of the shares of manufacturing and services in total GDP as well as the openness indicator, all of which are integrated into order one.
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Table of Contents
- Working Paper No. 1733 2
- September 2024 2
- Send correspondence to 2
- Abstract 4
- Keywords JEL Classifications 4
- ﺺﺨﻠﻣ 4
- 1. Introduction 5
- 2. The patterns of deindustrialization in Tunisia Morocco and Egypt 6
- Figure 1. Employment and value-added shares evolution in industry Tunisia 7
- Figure 2. Employment and value-added shares evolution in industry Morocco 7
- Figure 3. Employment and value-added shares evolution in industry Egypt 7
- Figure 4. Employment and value-added shares evolution in manufacturing Tunisia 8
- Figure 5. Employment and value-added shares evolution in manufacturing Morocco 8
- Figure 6. Employment and value-added shares evolution in manufacturing Egypt 9
- Table 1. Deindustrialization turning point by country group 10
- Table 2. Average annual growth rate of manufacturing value added by time period 10
- 3. Causes of deindustrialization 10
- 3.1 Causes of deindustrialization in developed countries 10
- A natural outcome of the development process 10
- - Innovation and technological change 11
- - Outsourcing and externalization 11
- - Trade openness with developing countries 11
- 3.2 Causes of deindustrialization in developing countries 11
- - Trade openness 12
- - Inadequate economic policies and hampered competitiveness 12
- Table 3. Global competitiveness index scores 2013-17 13
- 4. Does Deindustrialization Matter for Growth and Economic Development 13
- - Increasing returns technology and spillover effects 13
- - Labor productivity 14
- - Backward and forward linkages 14
- - Capital accumulation 14
- - The higher income elasticity of demand for manufactured goods 14
- - Employment potential 14
- 5. The role of manufacturing versus services in economic development the ongoing controversial debate 15
- 6. Empirical analysis and data overview the Tunisian case 16
- 6.1. The Econometric Model 16
- 𝑦𝑦 𝛽𝛽 𝑚𝑚 𝛽𝛽 𝑠𝑠 𝛽𝛽 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝛽𝛽 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝛽𝛽 𝑥𝑥 𝑙𝑙𝑙𝑙𝑠𝑠𝑃𝑃 2011 𝜀𝜀 16
- Table 4. Description of variables 16
- Table 4. Description of variables contd. 17
- 𝒚𝒚 𝒎𝒎 𝒔𝒔 𝒙𝒙 17
- 6.2. Empirical Results 17
- Table 5. Regressions results 19
- 7. Conclusion 19
- References 22
- Appendix A Time Series Unit Root Tests 26
- 1. GDPCapita growth at constant prices 26
- 2. Value-added manufacturing share 27
- 3. Value-added services share 28
- 4. Trade openness indicator 28
- 5. Inflation rate 30
- 6. Ln population 30
- 7. Manufacturing value-added growth rate 31
- 8. Services valued-added growth rate 31
- Appendix B 32
- Figure 7. Inverted u-shaped relationship between manufacturing value-added share and GDP per capita Tunisia 32
