ITU Economics cordially invites you to attend the following Economics PricewaterhouseCoopers-İTÜ Economics seminar:
Date & Time: April 21, 2016, Friday, 2:00PM.
Location: Room F235 - ITU Faculty of Management, Maçka 34337 Istanbul
Speaker: Suut Dogruel (Marmara University)
Title: Chinese Economic Expansion and the Manufacturing Sector in the MENA Region
The term deindustrialization is used to define the decline in the share of manufacturing as an economy reaches to a high income level. Kuznets addresses a decreasing trend in manufacturing output and employment is a natural outcome of development of a country due to the sectoral shift from manufacturing to services and thus create a deindustrialization. In addition to the structural change a la Kuznets, the worldwide shift of manufacturing to China is also shown another factor which may accelerate the deindustrialization in industrialized countries. However, the effect of Chinese boom on developing countries is not uniform: Particularly the economies in the South East also benefited from the worldwide shift of manufacturing. On the other hand, Chinese development hinders the industrialization efforts in the large number of developing countries.
The paper intends to examine the main determinants of the manufacturing development in the selected MENA countries. The Kuznets’ structural change hypothesis is taken as the starting point of the empirical model specification in the paper. The model is also designed to capture the effects of the other factors, such as oil resources and openness, in addition to the Chinese expansion. A panel data estimation is used for empiric models. The data source is the World Development Indicators of the World Bank.
The preliminary results reveal that openness, natural resources and the expansion of China in the world economy have considerable effects on the development of the manufacturing sector in the MENA countries. Openness and rich natural resources such as oil and natural gas are the main obstacles on the manufacturing development in the region. Chinese expansion in the world economy which is considered as the main source of the deindustrialization in the developed and the developing countries has limited impact. However, open MENA economies benefit from the Chinese expansion.