Technological innovations and premature deindustrialization: evidence from middle-income countries

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Abstract

Premature deindustrialization (PDI) has emerged as a critical challenge for middle-income countries amidst rapid technological innovations and globalization. This study explores how technological innovations (TI), measured by patent applications, influence PDI across 89 middle-income countries from 1980–2022. A novel composite index, integrating income levels and manufacturing sector contributions (value-added and employment shares), is developed to quantify PDI. Employing robust econometric techniques, including Ordinary Least Squares (OLS) with Oster’s stability test and Instrumental Variable Generalized Method of Moments (IV-GMM), we find that TI significantly reduces PDI’s likelihood. These results, consistent across subsamples and multiple robustness checks, underscore the pivotal role of innovation in fostering sustainable industrial growth. This research offers critical insights for policymakers aiming to balance technological advancement with industrial development in middle-income economies.

About the authors

Dieubenit Tsafack Miafo

University of Dschang

Author for correspondence.
Email: Dieubenit.tsafack@univ-dschang.org
ORCID iD: 0009-0007-2665-7616

doctoral student, Dschang School of Economics and Management

Cameroon, Dschang, B.P. 96

Armand Gilbert Noula

University of Dschang

Email: armandgilbert@yahoo.fr

Associate Professor, Dschang School of Economics and Management

Cameroon, Dschang, B.P. 96

Yokono Dieudonné Bondoma

University of Yaounde II

Email: dbondoma@yahoo.fr

Associate Professor, Faculty of Economics and Management

Cameroon, Yaounde, B.P. 18 SOA / B.P. 1365

Deffo Salomon Leroy Ghamsi

University of Dschang

Email: lavoidef@gmail.com
ORCID iD: 0000-0002-2854-4371

PhD, Dschang School of Economics and Management

Cameroon, Dschang, B.P. 96

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