The Review of Economics and Statistics Vol. 53 No. 2 1971
Level of Economic Development and Capital-Labor Ratios In Manufacturing
Abstract
INCE World War II, many developing countries have adopted a strategy of rapid industrialization to accelerate economic development and presumably to absorb unemployed or underemployed labor from the traditional sector. In spite of these efforts, the rate of economic growth has been far from satisfactory and unemployment has been persistent. Several authors 1 point to the adoption of more capital-intensive techniques of production as being responsible for the low rate of labor absorption. The objective of the present study is to examine the capital-intensity of the manufacturing sector for a cross section of developing countries, compared with a cross section of developed countries. We suggest that the capital-intensity of developing countries is relatively too high given factor endowments and market size. The hypothesis to be examined is as follows: The capital-intensity of output in the manufacturing sectors of developing countries behaves differently from that of developed countries. In general it tends to be higher than that of developed countries given respective levels of development.
- DOI
- 10.2307/1925714
- Volume
- 53
- Issue
- 2
- Pages
- 176
- Sources
- openalex crossref