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Income Distribution, Market Size, and Industrialization
Abstract
When world trade is costly, a country can profitably industrialize only if its domestic markets are large enough. In such a country, for increasing returns technologies to break even, sales must be high enough to cover fixed setup costs. We suggest two conditions conducive to industrialization. First, a leading sector, such as agriculture or exports, must grow and provide the source of autonomous demand for manufactures. Second, income generated by this leading sector must be broadly enough distributed that it materializes as demand for a broad range of domestic manufactures. These conditions have been important in several historical growth episodes.
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Citations
Cited by
Industrialization and the Big Push
Murphy, K. M., Shleifer, A., & Vishny, R. W. (1989) · Journal of Political Economy · doi:10.1086/261641 · Cited by 1,675
Self-citationElectricity provision and industrial development: evidence from India
Rud, J. P. (2012) · Journal of Development Economics · doi:10.1016/j.jdeveco.2011.06.010 · Cited by 318
The Rise of Mass Consumption Societies
Matsuyama, K. (2002) · Journal of Political Economy · doi:10.1086/341873 · Cited by 270
Foreign direct investment inflows and the industrialization of African countries
Gui-Diby, S. L., & Renard, M.-F. (2015) · World Development · doi:10.1016/j.worlddev.2015.04.005 · Cited by 211
Rethinking the agrarian question: Agriculture and underdevelopment in the Global South
Carlson, C. (2018) · Journal of Agrarian Change · doi:10.1111/joac.12258 · Cited by 32
Metadata
- Authors
- Murphy, K. M., Shleifer, A., & Vishny, R.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 1989-08
- Volume
- 104
- Issue
- 3
- Pages
- 537
- ISSN
- 0033-5533 (ISSN-L)
- OpenAlex
- W1996482653
- Cited by
- 702
- References
- 0
- FWCI
- 24.11
- Type
- journal article
- Language
- en
- Open access
- closed
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- Murphy, K. M., Shleifer, A., & Vishny, R. (1989). Income Distribution, Market Size, and Industrialization. The Quarterly Journal of Economics. https://doi.org/10.2307/2937810
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