STAGE-CONTINGENT FUNDAMENTALS OF STRUCTURAL TRANSFORMATION: EVIDENCE FROM UNIVARIATE LOGISTIC REGRESSIONS
DOI:
https://doi.org/10.52123/1994-2370-2025-1540Keywords:
structural transformation, stage of development, industrialization, diversification, complexity, innovation, univariate logistic regressionAbstract
This paper explores the fundamental factors influencing movement across five developmental stages within a global country classification as proposed by Aituar et al. We operationalize the staged frameworks of Rostow, Ohno, and Porter by estimating stage-specific univariate logistic regressions for each transition, utilizing a comprehensive set of institutional, policy, and capability variables while reporting odds ratios and ranking the leading predictors for each transition. In this framework of structural transformation, economies advance along a path of manufacturing led development, progressing from pre-industrial conditions to early manufacturing, followed by diversification through enhanced domestic linkages and integration into global value chains, increased complexity, and ultimately reaching an innovation frontier. Our findings support and refine this narrative: the take-off stage is most closely linked to investment capacity and basic appropriability; diversification is associated with administrative and legal predictability as well as external-risk management; maturity correlates with significant investment and appropriability effects alongside regulatory alignment and advanced factor conditions; and entry into the frontier and sustained presence there is tied to robust rule-of-law institutions and disciplined openness. Indicators tend to strengthen systematically across stages. Two refinements emerge from our analysis: appropriability (proxied by intellectual property as % of GDP) plays a more significant role earlier than the literature suggests, and the positive associations observed between inflation volatility (proxied by standard deviation of inflation) reflects temporary reform turbulence rather than causal growth and stage advancement.
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