{"paper_id":"25618f63-94f5-40c0-a1b5-045dc10c9bee","body_text":"Technology, Finance, and Institutional Conditions for Structural Change in Upper-Middle-Income Countries: A New Structural Economics Perspective | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Technology, Finance, and Institutional Conditions for Structural Change in Upper-Middle-Income Countries: A New Structural Economics Perspective Ali Raaz, Feihu Zheng This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8630493/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper employs the new structural economics (NSE) framework to examine how technological advancement and financial deepening affect structural change in upper-middle-income countries (UMICs), with institutional quality serving as a conditioning factor rather than an independent catalyst. The main purpose of this article is to integrate previously separated factors to understand their overall effects on structural change in UMICs. To estimate the relationships and address the problem of endogeneity, this paper employs two-stage instrumental-variable regression with Driscoll-Kraay standard errors for long-term and a panel error correction model (ECM) for the short-term using data from 37 countries between 1996 and 2023. The findings indicate that technological advancement and financial deepening have a significant positive effect on long-term structural development. This paper explains the long-run relationship that exists between technology and finance in promoting structural change, while institutional quality conditions these effects instead of acting as an independent stimulus; hence, it presents policymakers with actionable recommendations on how to attain sustainable structural change. CLASSIFICATION JEL: O33, O47, O14, G20 Development Economics International Economics Macroeconomics New structural economics technology advancement financial deepening institutional quality structural change. Full Text Additional Declarations The authors declare no competing interests. Supplementary Files AllDeclarations.docx Declarations Dataset.xlsx Data supportingstatacodes.txt Stata codes Chart2.xlsx Chart3.xlsx Chart 2 and 3 Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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