Manufacturing and economic growth in developing countries, 1950–2005

• We re-examine the role of manufacturing as a driver of growth in developed and developing countries in the period 1950–2005.
• We find a moderate positive impact of manufacturing on growth and interesting interaction effects of manufacturing with education and income gaps.
• Manufacturing is becoming a more difficult route to growth than before after 1990.

Historically, manufacturing has functioned as the main engine of economic growth and development. However, recent research raises questions concerning the continued importance of the manufacturing sector for economic development. We re-examine the role of manufacturing as a driver of growth in developed and developing countries in the period 1950–2005. We find a moderate positive impact of manufacturing on growth. We also find interesting interaction effects of manufacturing with education and income gaps. In a comparison of the subperiods, it seems that since 1990, manufacturing is becoming a more difficult route to growth than before.