, Volume 10, Issue 3, pp 277–309 | Cite as

From agriculture to manufacturing: How does geography matter?

  • Nguyen Thang DaoEmail author
Original Paper


This article advances a theory to show that geographical advantage for agricultural production helps an economy to become more prosperous in the predominantly agricultural regime, but delays the timing of transition to manufacturing production (i.e., the timing of industrialization). It also delays the change in labor structure toward an increase in proportion of skilled labor, and hence, the economy may be overtaken in the development process by another with less geographical advantage for agriculture. This theoretical result is in accordance with recent empirical evidence and helps explain the reversals of national fortune, which are documented in economic history. Within its analytical framework, the article also enriches the existing literature by explaining the decline in fertility and the evolution of labor structure, along with technological progress, in the development process.


Agricultural sector Manufacturing sector Labor structure Technological progress Geographical advantage for agriculture Reversal of fortune 

JEL Classification

J11 J13 O11 O41 



I would like to thank Claude Diebolt (the editor), two anonymous referees, David de la Croix, Jean Hindriks, Cuong Le Van, and particularly Julio Dávila for helpful comments and suggestions. I am also grateful to Claudine Chen from whom I learnt the simulation language of Python which is employed in this research. I benefited from the comments of participants at 13th SAET Conference on Current Trends in Economics MINES ParisTech and at MCC research seminar. The fundings from a research grant “Mobilité Ulysse F.R.S.-FNRS” of the Belgian FNRS, from CORE, and from “Commission universitaire pour le dévelopment—CUD” are acknowledged. The scientific responsibility is assumed by myself as the author.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.Mercator Research Institute on Global Commons and Climate Change (MCC)BerlinGermany
  2. 2.COREUniversité catholique de Louvain (UCL)Louvain-la-NeuveBelgium
  3. 3.Vietnam Institute for Economic and Policy Research (VEPR)Cau GiayVietnam

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