Industrial Allocation and Growth Trajectories: a multi-level approach

This dissertation investigates the process of economic growth with heterogeneous agents from a multi-level perspective. Building upon Kaldorian and Evolutionary principles, growth is defined as a path-dependent and complex phenomenon, which requires structural variation and the interplay between demand and supply at distinct analytical levels. Two concomitant and dependent 'layers' of this process are emphasised: the supply-led 'intra-sectoral development trajectory' and the demand-led 'inter-sectoral development trajectory'. The key element in the first is the firm size, which is shown to have a non-linear influence on the process of technological change. The second layer is shown to depend on the growth of income and patterns of production and consumption reflected on the inter-sectoral composition and level of 'sophistication' of the productive structure. The key to understand divergent growth trajectories lies in the interaction between these layers and the contradictory effects imposed at each analytical level both by demand (top-down) and supply (bottom-up). The approach is both theoretical and empirical and the analysis reveals important stylised facts of growth at the firm, sector and country levels. The text is structured in four sections comprising 9 chapters. Section I introduces the theoretical foundations of the work and the limitations of Evolutionary and Kaldorian schools to explain the multi-level 'allocation problem'. Section II presents the databases and empirically assesses the influence of the (re)allocation of labour on growth at each analytical level. Section III investigates the foundations of the process of micro-meso and macro process of development. The final section proposes a unified theoretical framework to connect the multi-level evidence. The analysis reinforces the interplay between demand and supply in growth trajectories, prompting a number of original policy implications.Capes Cambridge Overseas Trus