Growth Slowdowns in Emerging Market Economies – The Concept of the Middle-Income Trap : With a Special Focus on the Chinese Economy

Glawe, Linda

This thesis provides an in-depth analysis of the growth and economic development in emerging market economies with a special focus on the MIT concept and the concrete application to the Chinese economy. It can be positioned within the broader literature on economic growth, in particular the literature on income convergence. The main objectives of this thesis are (i) to assess empirically and theoretically why countries (particularly China) can become trapped at the middle-income level and analyze the underlying mechanisms, (ii) to make MIT forecasts (particularly for the Chinese economy) and (iii) to suggest policy implications that help countries to successfully overcome the MIR. As a whole, this thesis analyzes the MIT from various standpoints by covering empirical and theoretical aspects. Overall, it consists of seven essays. A comprehensive overview on the MIT concept is provided in the first essay. The second essay then particularly analyzes the MIT situation for China by using the key findings elaborated in the literature survey. Both essays also extensively discuss the weaknesses of the MIT concept (in general and for assessing the MIT probability in China) and underline the need for a growth-theoretical foundation of the MIT. The third essay then proposes a (multi-sector) growth model of China’s economy that can explain a (potential) MIT in China. Essays four, five, and six then provide a detailed analysis of the role of the deep determinants, namely geography, institutions, culture, and integration, for the MIT probability and also for the economic development of the Chinese provinces. Thus, they offer an alternative to the proximate factors (which are the primary subject of the first three essays) for explaining an MIT. The final essay then elaborates the future challenges of MICs by analyzing the impact of the 4th Industrial Revolution on the MIT mechanism and growth drivers of MICs.




Glawe, Linda: Growth Slowdowns in Emerging Market Economies – The Concept of the Middle-Income Trap. With a Special Focus on the Chinese Economy. 2019. Fernuniversität Hagen.


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