LAUSR.org creates dashboard-style pages of related content for over 1.5 million academic articles. Sign Up to like articles & get recommendations!

The role of power prices in structural transformation: Evidence from the Philippines

Photo by acfb5071 from unsplash

The Philippines provides an extreme example of Rodrik’s observation that late developing countries experience deindustrialization at lower levels of per capita income than more advanced economies. Previous studies point to… Click to show full abstract

The Philippines provides an extreme example of Rodrik’s observation that late developing countries experience deindustrialization at lower levels of per capita income than more advanced economies. Previous studies point to the role of protectionist policies, financial crises, and currency overvaluation as explanations for the shrinking share of the industry sector. We complement this literature by examining the role of power prices in the trajectory of industry share. We make use of data at the country level for 33 countries over the period 1980–2014 and at the Philippine regional level for 16 regions over the period 1990–2014. We find that higher power prices tend to amplify deindustrialization, causing industry share to turn downward at a lower peak and a lower per capita income, and to decline more steeply than otherwise. In a two-country comparison, we find that power intensive manufacturing subsectors have expanded more rapidly in Indonesia, where power prices have been low, whereas Philippine manufacturing has shifted toward less power intensive and more labor intensive subsectors in the face of high power prices.

Keywords: power prices; prices structural; power; role power; structural transformation

Journal Title: Journal of Asian Economics
Year Published: 2019

Link to full text (if available)


Share on Social Media:                               Sign Up to like & get
recommendations!

Related content

More Information              News              Social Media              Video              Recommended



                Click one of the above tabs to view related content.