Beyond resource frontiers: resource-led industrialisation and manufacturing deepening in resource-dependent developing economies

Resource-dependent developing economies increasingly pursue downstream processing as a pathway toward industrial transformation, yet expanding industrial activity does not necessarily imply deeper manufacturing development. This study examines whether resource-linked economic integration is associated with broad industrial expansion or manufacturing deepening. Using country-year data for 28 resource-dependent developing economies over 2000–2022, the analysis compares industry value added and manufacturing value added through two-way fixed-effects models and extends the evidence to global value-chain participation, economic complexity, and Asian economies. Mineral rents and trade openness are positively associated with industry value added but not with manufacturing value added, while FDI shows no robust baseline association. The GVC and economic-complexity evidence provides no corresponding systematic indication of deeper productive transformation. The Asian results broadly reinforce this distinction. Robustness and instrumental-variable assessments support the stability of the central pattern but do not establish definitive causality. The findings raise a broader concern, captured here as resource-led industrialisation illusion, that visible industrial expansion may create an overly optimistic impression of structural transformation when evidence of deeper manufacturing and productive capabilities remains limited.