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Unconditional Convergence in Manufacturing: A Reassessment

Year: 2026

Type: article

Abstract: The movement of labor out of agriculture is a central feature of the development process. A long-held view is that successful development requires that much of the labor released from agriculture be allocated to manufacturing rather than services. Rodrik's (2013) finding of unconditional convergence for manufacturing productivity, using data from UNIDO, provided empirical support for this view. We argue that the UNIDO data are ill-suited for studying cross-country productivity dynamics. Using recently released GGDC data designed for this purpose, we revisit the issue and find no evidence of unconditional convergence in manufacturing productivity over 1990–2018. (JEL D24, J24, L60, O13, O14, O47, Q10)

Source: American Economic Review Insights

DOI: 10.1257/aeri.20250071

Authors: Berthold Herrendorf, Richard Rogerson, Ákos Valentinyi

Institutions: National Bureau of Economic Research, Princeton University, Corvinus University of Budapest, University of Manchester, Centre for Economic Policy Research

Language: English

Topic: Economic Growth and Productivity

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: green

OpenAlex ID: W7204486542