Research agenda

This paper introduces the Structural Transformation in Manufacturing Database (STiM), which provides employment, value-added, and output data at the two-digit manufacturing sub-sectoral level. In its current version, the database covers 12 homogenised industrial activities across more than 145 countries from 1963 to 2019. It is the result of combining several data sources and undertaking substantial harmonisation efforts aimed at ensuring internal, intertemporal, and international consistency. In addition, the database links several price deflators from multiple institutions to adjust nominal measures, thereby producing estimates of real value-added and constant output. To date, this makes the STiM database the most comprehensive dataset for long-run analyses of structural change within manufacturing in both developed and developing economies. The final database and the replication package will be made freely available at the corresponding GitHub repository.

Industrial policies have regained prominence, prompting a renewed interest in exploring patterns of structural change in manufacturing. As such, this paper leverages a unique dataset at the manufacturing sub-sectoral level to explore external and internal trends in manufacturing shares. It specifically discusses the premature deindustrialisation hypothesis by examining the scale and timing of both industrialisation and deindustrialisation spikes. Drawing on employment and value-added data for twelve manufacturing activities in over 145 countries from 1963 to 2018, the results show a significant decline in manufacturing trends driven by South America, Europe, North America, and, to a lesser extent, Central America. In contrast, Asian countries are pulling ahead, being the fastest-growing industrialisation group. While most findings confirm that premature deindustrialisation is a genuine threat not sparing any specific industrial groups, the analysis also reveals some striking structural transformations ongoing within the manufacturing sector of many developing regions, especially in the Middle East and Africa. Overall, combining both the external and internal perspectives highlights the diversity of structural change patterns in manufacturing, thus calling for more tailored industrial policies.

This paper investigates the extent to which manufacturing exhibits labour productivity convergence. Drawing on a newly harmonised dataset covering 175 countries and 12 manufacturing sub-sectors over six decades (1963-2019), the results support the β-convergence hypothesis, pointing to a significant and robust negative relationship between initial productivity levels and subsequent growth rates. This convergence effect is broad-based across manufacturing sub-sectors and strengthens over time, particularly from the 1990s onward. Taken together, these findings lend support to the view that reallocating factors of production towards manufacturing sub-sectors may generate substantial economy-wide gains. At the same time, dispersion in productivity levels in 2019 happened to be exactly the same as in 1963. A breakdown of this result reveals substantial variation over time, suggesting that a short decade of uneven productivity dynamics (1983-1993) was sufficient to generate such a marked increase in dispersion that reversing it required nearly three decades (1993-2019). This latter period was thus the only one during which both β-convergence and σ-convergence went hand in hand.

This paper investigates the extent to which China's rapid economic rise has influenced the manufacturing sector in developed and developing countries. Drawing on a comprehensive panel dataset covering at country level 12 distinct manufacturing subsectors from 1995 to 2015, we analyse the dynamics of Chinese trade penetration. Preliminary results indicate a negative impact of Chinese imports on domestic manufacturing employment (and output). Specifically, Chinese imports exert direct downward pressure on local markets. More significantly, however, our findings highlight an indirect effect of Chinese competition through heightened rivalry in third-country markets. This indirect impact is particularly evident in sectors where the affected countries have strong specialisation, suggesting that Chinese competition intensifies global market pressures, thereby magnifying its influence on domestic industries.