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Deconstructing the BRICs: Structural transformation and aggregate productivity growth

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  • de Vries, Gaaitzen J.
  • Erumban, Abdul A.
  • Timmer, Marcel P.
  • Voskoboynikov, Ilya
  • Wu, Harry X.

Abstract

This paper studies structural transformation and its implications for productivity growth in the BRIC countries (Brazil, Russia, India, and China) from the 1980s onwards. Based on a critical assessment of the reliability and consistency of various primary data sources, we bring together a new database that provides trends in value added and employment at a detailed 35-sector level. Structural decomposition analysis suggests that for China, India and Russia reallocation of labor across sectors is contributing to aggregate productivity growth, whereas in Brazil it is not. This confirms and strengthens the findings of McMillan and Rodrik [NBER Working Paper 17143, 2011]. However, this result is overturned when a distinction is made between formal and informal activities within sectors. Increasing formalization of the Brazilian economy since 2000 appears to be growth-enhancing, while in India the increase in informality after the reforms is growth-reducing.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 40 (2012)
Issue (Month): 2 ()
Pages: 211-227

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Handle: RePEc:eee:jcecon:v:40:y:2012:i:2:p:211-227

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: Economic growth; New structural economics; Structural change; BRIC countries;

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Citations

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Cited by:
  1. Vatthanamixay Chansomphou & Masaru Ichihashi, 2013. "Structural change, labor productivity growth, and convergence of BRIC countries," IDEC DP2 Series, Hiroshima University, Graduate School for International Development and Cooperation (IDEC) 3-5, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
  2. Bonatti, Luigi & Fracasso, Andrea, 2013. "Regime switches in the Sino-American co-dependency: Growth and structural change in China," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 25(C), pages 1-32.
  3. Pablo Villar Vileikis, 2013. "Formalización: Motor de cambio estructural positivo. El caso colombiano entre 2002 y 2011," DOCUMENTOS CEDE, UNIVERSIDAD DE LOS ANDES-CEDE 011467, UNIVERSIDAD DE LOS ANDES-CEDE.
  4. Lee, Jong-Wha & McKibbin, Warwick J., 2014. "Service Sector Productivity and Economic Growth in Asia," ADBI Working Papers, Asian Development Bank Institute 490, Asian Development Bank Institute.
  5. You, Jing & Huang, Yongfu, 2013. "Green-to-Grey China: Determinants and Forecasts of its Green Growth," MPRA Paper 57468, University Library of Munich, Germany, revised 16 Jul 2014.
  6. Sepp, Jüri & Varblane, Uku, 2014. "The decomposition of productivity gap between Estonia and Korea," Discourses in Social Market Economy, OrdnungsPolitisches Portal (OPO) 2014-03, OrdnungsPolitisches Portal (OPO).
  7. Wlasiuk, Juan Marcos, 2013. "The Mechanics of Real Undervaluation and Growth," MPRA Paper 56628, University Library of Munich, Germany.
  8. Lavopa, Alejandro & Szirmai, Adam, 2012. "Industrialization, employment and poverty," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 081, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  9. KARGI, Bilal, 2014. "The Effects of BRICS and MATIK Countries on World Economy and Cointegration Analysis The Long Term Relation G-7 Growth Rates (1962-2012)," MPRA Paper 55693, University Library of Munich, Germany.
  10. Kathuria, Vinish & Rajesh Raj, S.N. & Sen, Kunal, 2013. "The effects of economic reforms on manufacturing dualism: Evidence from India," Journal of Comparative Economics, Elsevier, Elsevier, vol. 41(4), pages 1240-1262.
  11. KARGI, Bilal, 2014. "Structural Breakage and Long Term Cointegration Analysis for Economic Growth in G-7, BRICS and MATIK Countries (1962-2012)," MPRA Paper 57106, University Library of Munich, Germany.
  12. Mitsukuni Nishida & Amil Petrin & Sašo Polanec, 2013. "Exploring Reallocation’s Apparent Weak Contribution to Growth," NBER Working Papers 19012, National Bureau of Economic Research, Inc.
  13. Naudé, Wim & Szirmai, Adam & Lavopa, Alejandro, 2013. "Industrialization Lessons from BRICS: A Comparative Analysis," IZA Discussion Papers 7543, Institute for the Study of Labor (IZA).

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