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Uganda's growth in gross domestic product of the 2000s was accompanied by high growth rates of labor productivity across industries producing tradable goods and services. This came about primarily as a result of investment in equipment and other fixed assets, but also entailed substantial gains in total factor productivity Based on data from two waves of the Uganda Business Indicators survey this paper estimates that economy wide aggregate labor productivity and aggregate TFP grew at average annual rates of 13 t and 3 percent, respectively between survey years 2002 and 2009. Part of the growth in productivity on each measure reflected gains from technical progress made at the establishment level and within narrowly defined industries. But it was also in part the outcome of reallocation of labor and capital within as well as across industries. In particular, the paper estimates that about one-fifth of the aggregate growth in labor productivity between the two years reflected the shifting of labor toward industries and sectors where it was more productive on average and at the margin. The rest of the observed growth in labor productivity reflected gains made within narrowly defined industries. But almost in every case 55 to 90 percent of the observed "within industry" growth in labor productivity represented allocative efficiency gains from the correction of intra-industry inter-firm misallocation of labor. The balance of the observed within-industry growth in labor productivity represented establishment-level gains in technical efficiency.

Economic Development --- Economic Growth And Aggregate Productivity --- Economy Wide Country Studies --- Industrialization --- Manufacturing And Service Industries

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This paper provides a theoretical model to address the issue of how industrialization affects the structure of international trade. Considering both horizontal and vertical product differentiation, the model shows that intra-industry trade increases when product quality improvement emerges in a developing country and when a difference in relative factor endowments between a developed and a developing countries shrinks. To promote understanding of the conclusions of the model, the paper also uses actual trade data between Japan and Indonesia and between Japan and Korea.

Investments: Commodities --- Exports and Imports --- Economic Development --- Industries: Manufacturing --- Models of Trade with Imperfect Competition and Scale Economies --- Empirical Studies of Trade --- Industry Studies: Manufacturing: General --- Agriculture: General --- Trade: General --- Industrialization --- Manufacturing and Service Industries --- Choice of Technology --- Manufacturing industries --- Investment & securities --- International economics --- Development economics & emerging economies --- Manufacturing --- Agricultural commodities --- Exports --- Imports --- Economic sectors --- Commodities --- Development --- International trade --- Farm produce --- Indonesia

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Uganda's economy underwent significant structural change in the 2000s whereby the share of non-tradable services in aggregate employment rose by about 7 percentage points at the expense of the production of tradable goods. The process also involved a 12-percentage-point shift in employment away from small and medium enterprises and larger firms in manufacturing and commercial agriculture mainly to microenterprises in retail trade. In addition, the sectoral reallocation of labor on these two dimensions coincided with significant growth in aggregate labor productivity. However, in and of itself, the same reallocation could only have held back, rather than aid, the observed productivity gains. This was because labor was more productive throughout the period in the tradable goods sector than in the non-tradable sector. Moreover, the effect on aggregate labor productivity of the reallocation of employment between the two sectors could only have been reinforced by the impacts on the same of the rise in the employment share of microenterprises. The effect was also strengthened by a parallel employment shift across the age distribution of enterprises that raised sharply the employment share of established firms at the expense of younger ones and startups. Not only was labor consistently less productive in microenterprises than in small and medium enterprises and larger enterprises across all industries throughout the period, it was also typically less productive in more established firms than in younger ones.

E-business --- Economic development --- Economic growth and aggregate productivity --- Economic theory & research --- Economy wide country studies --- Finance and financial sector development --- Industrialization --- Labor markets --- Labor policies --- Macroeconomics and economic growth --- Manufacturing and service industries --- Private sector development --- Social protections and labor

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This paper constructs an integrated framework to disentangle the underlying economic mechanism of industrial transformation. We consider three essential elements for the analysis: skill requirements, industry-wide spillovers, and degrees of consumption subsistence. We find that human and nonhuman resources, production factor matching, and industrial coordination are all important for activating a modern industry. In the process of industrial transformation, job destruction may exceed job creation, and income distribution may get worse immediately following the activation of a modern industry. An array of policy prescriptions for advancing a poor country is provided.

Labor --- Macroeconomics --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Industrialization --- Manufacturing and Service Industries --- Choice of Technology --- Factor Income Distribution --- Labor Economics: General --- Unemployment: Models, Duration, Incidence, and Job Search --- Professional Labor Markets --- Occupational Licensing --- Wages, Compensation, and Labor Costs: General --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Labour --- income economics --- Skilled labor --- Labor economics --- Labor market --- Economic theory --- Taiwan Province of China

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This paper proposes a possible framework for identifying excessive investment. Based on this method, it finds evidence that some types of investment are becoming excessive in China, particularly in inland provinces. In these regions, private consumption has on average become more dependent on investment (rather than vice versa) and the impact is relatively short-lived, necessitating ever higher levels of investment to maintain economic activity. By contrast, private consumption has become more self-sustaining in coastal provinces, in large part because investment here tends to benefit household incomes more than corporates. If existing trends continue, valuable resources could be wasted at a time when China’s ability to finance investment is facing increasing constraints due to dwindling land, labor, and government resources and becoming more reliant on liquidity expansion, with attendant risks of financial instability and asset bubbles. Thus, investment should not be indiscriminately directed toward urbanization or industrialization of Western regions but shifted toward sectors with greater and more lasting spillovers to household income and consumption. In this context, investment in agriculture and services is found to be superior to that in manufacturing and real estate. Financial reform would facilitate such a reorientation, helping China to enhance capital efficiency and keep growth buoyant even as aggregate investment is lowered to sustainable levels.

Investments --- Consumption (Economics) --- China --- Economic conditions. --- Investments: General --- Investments: Stocks --- Macroeconomics --- Investment --- Capital --- Intangible Capital --- Capacity --- Industrialization --- Manufacturing and Service Industries --- Choice of Technology --- Regional Economic Activity: Growth, Development, and Changes --- Size and Spatial Distributions of Regional Economic Activity --- Macroeconomics: Consumption --- Saving --- Wealth --- Aggregate Factor Income Distribution --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Investment & securities --- Private consumption --- Income --- Consumption --- Stocks --- Private investment --- National accounts --- Financial institutions --- Economics --- Saving and investment --- China, People's Republic of