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Leading Dragon Phenomenon: New Opportunities for Catch-up in Low-Income Countries, Asian Development Review, Vol. 30 (1 ), pp. 52-84

dc.contributor.authorVandana Chandra
dc.contributor.authorJustin Yifu Lin
dc.contributor.authorYan Wang
dc.description.abstractModern economic development is accompanied by the structural transformation from an agrarian to an industrial economy. Since the 18th century, all countries that industrialized successfully have followed their comparative advantages and leveraged the latecomer advantage, including emerging market economies such as the People’s Republic of China (PRC), India, and Indonesia. The current view is that Chinese dominance in manufacturing hinders poor countries from developing similar industries. We argue that rising labor cost is causing the PRC to graduate from labor-intensive to more capital-intensive and technologyintensive industries. This will result in the relocation of low-skill manufacturing jobs to other low-wage countries. This process,whichwe call the “leading dragon phenomenon,” offers an unprecedented opportunity to low-income countries. Such economies can seize this opportunity by attracting the rising outward foreign direct investment flowing from Brazil, the PRC, India, and Indonesia into the manufacturing sectors. All low-income countries can compete for the jobs spillover from the PRC and other emerging economies, but the winner must implement credible economic development strategies that are consistent with its comparative advantage.
dc.publisherAsian Development Bank and Asian Development Bank Institute
dc.rightsCC BY 3.0 IGO
dc.titleLeading Dragon Phenomenon: New Opportunities for Catch-up in Low-Income Countries, Asian Development Review, Vol. 30 (1 ), pp. 52-84
dc.subject.adbstructural transformation
dc.subject.adbPeople’s Republic of China
dc.subject.adbflying geese
dc.title.seriesAsian Development Review
dc.title.volumeVolume 30, Number 1, pp. 52-84
dc.contributor.imprintAsian Development Bank
oar.themeLabor Migration
oar.authorChandra, Vandana
oar.authorLin, Justin Yifu
oar.authorWang, Yan

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  • Asian Development Review
    The Asian Development Review (ADR) is a professional journal for disseminating the results of economic and development research relevant to Asia and the Pacific. Since 1983, the ADR has been an important part of the history of the Asian Development Bank and its mission to reduce poverty across Asia and the Pacific.

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