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Why do poor countries make simple products?

Post, Søren LU (2020) SGED10 20201
Human Geography
Department of Human Geography
Abstract
The products produced in rich countries are very different from the products produced in poor countries. Why? Unreliable electricity is often cited as one of the main challenges facing industrial production in less developed economies. In this paper, I connect these two observations by linking interruptions in the production environment to the sophistication of the production output. Using a data set covering more than 500,000 observations of manufacturing plants in India between 2000 and 2016, I find evidence suggesting that the level of interruption, modeled here using electricity shortages, contained in a plant's input supply is strongly associated with whether or not more complex products have a positive relationship with plant... (More)
The products produced in rich countries are very different from the products produced in poor countries. Why? Unreliable electricity is often cited as one of the main challenges facing industrial production in less developed economies. In this paper, I connect these two observations by linking interruptions in the production environment to the sophistication of the production output. Using a data set covering more than 500,000 observations of manufacturing plants in India between 2000 and 2016, I find evidence suggesting that the level of interruption, modeled here using electricity shortages, contained in a plant's input supply is strongly associated with whether or not more complex products have a positive relationship with plant revenues. This suggests a new pathway between the production environment at the local level and the aggregate complexity of the economy. (Less)
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author
Post, Søren LU
supervisor
organization
course
SGED10 20201
year
type
M2 - Bachelor Degree
subject
keywords
India, manufacturing, economic complexity, input-output, electricity
language
English
id
9016224
date added to LUP
2020-06-25 12:01:45
date last changed
2020-06-25 12:01:45
@misc{9016224,
  abstract     = {{The products produced in rich countries are very different from the products produced in poor countries. Why? Unreliable electricity is often cited as one of the main challenges facing industrial production in less developed economies. In this paper, I connect these two observations by linking interruptions in the production environment to the sophistication of the production output. Using a data set covering more than 500,000 observations of manufacturing plants in India between 2000 and 2016, I find evidence suggesting that the level of interruption, modeled here using electricity shortages, contained in a plant's input supply is strongly associated with whether or not more complex products have a positive relationship with plant revenues. This suggests a new pathway between the production environment at the local level and the aggregate complexity of the economy.}},
  author       = {{Post, Søren}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Why do poor countries make simple products?}},
  year         = {{2020}},
}