Economic Diversification In Developing Countries

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Economic diversification has been regarded as a major tool and source of sustainable economic growth and development in developed, emerging and developing economies through direct effect on the GDP by increasing economic activities and indirectly through multiplier effect, backward and forward linkages among the various sectors of the economy (Anyaehie&Areji, 2015; Akpan, 2009;Gachino, 2007). Classical and neo-classical economics theory projected convergence between poor developing countries and the developed countries in the longrun largely due to transfer of technology and capital from the developed countries to the developing countries. One of the way capital and technology are transferred from developed countries to developing countries is through the inflow of foreign direct investment that can only be possible through economic diversification (Solow, 1956; Romer, 1990; Noko, 2016b). Lewis (1954) argued that what is happening in the modern sector of the economy (industrial and modernized agriculture sector) determines how labour and capital flow from the traditional sector (primitive framing practice) to the modern sector (Timms, 2008).
Economic diversification therefore becomes a necessity for sustained growth in developing countries that are largely dependent on the production, utilization and export of one particular type of product over time. Economic diversification entails strong and deliberate involvement in wide range of economic activities key to the growth
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