The Portuguese Manufacturing Industry (1996-2004): Which Capacity for Structural Changes?

Abstract

The investment decisions of firms in relation to both, physical or intangible investments and to human capital are important determinants of any structural pattern. In this context, our objective is to evaluate the ability developed by firms’ Portuguese manufacturing, to make the necessary changes on the specialisation pattern. Because intangible investments are, by nature, difficult to measure and evaluate, we use WIFO taxonomies applied to the manufacturing industry. These taxonomies allow to makes at least some of the intangibles a bit more tangible for quantitative analysis. The results point towards a specialisation in labour-intensive and low-skill manufacturing with no great changes during the period, revealing all the while a reduced capacity to adapt, which could affect the competitive process within an enlarged market.