IDEAS home Printed from https://ideas.repec.org/a/khe/scajes/v2y2016i4p139-156.html
   My bibliography  Save this article

Service Sector: The Source of Output and Employment Growth in Ethiopia

Author

Listed:
  • Zelalem Ejigu Kabeta
  • Inderjeet Singh Sidhu

Abstract

According to official data, the Ethiopian economy has grown at 10.9% on average in 2004/05-2014/15. During this period a structural change is observed as agriculture declined in its share and service sector dominates the economy. Hence, in this study we used a Shapely decomposition method to identify the service sector contributions to per capita GDP and employment growth during two periods of (1999-2005) and (2005-2013). Per capita GDP was decomposed into employment rate, productivity, and demographic changes. The result shows that during (1999-2005) growth periods, Ethiopian per capita GDP growth was mainly contributed by employment rate changes originated from the agriculture sector. Whereas the service sector has the highest contribution in productivity but a negative contribution in employment change. However, during the high growth period of (2005-2013) the growth in per capita GDP is due to productivity growth which emanates from the service sectors specifically from the distributive service sector.

Suggested Citation

  • Zelalem Ejigu Kabeta & Inderjeet Singh Sidhu, 2016. "Service Sector: The Source of Output and Employment Growth in Ethiopia," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 2(4), pages 139-156, December.
    • Handle: RePEc:khe:scajes:v:2:y:2016:i:4:p:139-156
    as

    Download full text from publisher

    File URL: http://www.ajes.ro/wp-content/uploads/AJES_article_1_82.pdf
    Download Restriction: no
    File URL: http://www.ajes.ro/wp-content/uploads/AJES_article_1_82.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ghani, Ejaz (ed.), 2010. "The Service Revolution in South Asia," OUP Catalogue, Oxford University Press, number 9780198065111.
    2. Ghani, Ejaz & Kharas, Homi, 2010. "The Service Revolution," World Bank - Economic Premise, The World Bank, issue 14, pages 1-5, May.
    3. Chenery, Hollis & Taylor, Lance, 1968. "Development Patterns: Among Countries And Over Time," Center for International Affairs (CIA) Archive 294545, Harvard University, Center for International Affairs.
    4. Rashmi Banga, 2005. "Role of Services in the Growth Process: A Survey," Indian Council for Research on International Economic Relations, New Delhi Working Papers 159, Indian Council for Research on International Economic Relations, New Delhi, India.
    5. Yared Seid & Alemayehu Seyoum Taffesse & Seid Nuru Ali, 2015. "Ethiopia - an agrarian economy in transition," WIDER Working Paper Series wp-2015-154, World Institute for Development Economic Research (UNU-WIDER).
    6. Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michel Lioussis & Mònica Serrano, 2022. "Services trade contribution on global income generation (2000 - 2014) Abstract: This paper investigates the contribution of services trade to the variation of global income generation for the period o," UB School of Economics Working Papers 2022/423, University of Barcelona School of Economics.
    2. Abiodun Moses Adetokunbo & Ochuwa Priscillia Edioye, 2020. "Response of economic growth to the dynamics of service sector in Nigeria," Future Business Journal, Springer, vol. 6(1), pages 1-10, December.
    3. Ndubuisi, Gideon & Otioma, Chuks & Tetteh, Godsway Korku, 2021. "Digital infrastructure and employment in services: Evidence from Sub-Saharan African countries," Telecommunications Policy, Elsevier, vol. 45(8).
    4. Di Meglio, Gisela & Gallego, Jorge, 2022. "Disentangling services in developing regions: A test of Kaldor's first and second laws," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 221-229.
    5. Gideon Nkam Taka & Ta Thi Huong & Izhar Hussain Shah & Hung-Suck Park, 2020. "Determinants of Energy-Based CO 2 Emissions in Ethiopia: A Decomposition Analysis from 1990 to 2017," Sustainability, MDPI, vol. 12(10), pages 1-17, May.
    6. Selamawit G. Kebede & Almas Heshmati, 2020. "Energy Use and Labor Productivity in Ethiopia: The Case of the Manufacturing Industry," Energies, MDPI, vol. 13(11), pages 1-21, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kumar Gaurav & Nalin Bharti, 2018. "India–Japan CEPA," Foreign Trade Review, , vol. 53(3), pages 189-203, August.
    2. Ghani, Ejaz & Kharas, Homi, 2010. "The Service Revolution," World Bank - Economic Premise, The World Bank, issue 14, pages 1-5, May.
    3. Shahbaz Nasir & Kaliappa Kalirajan, 2016. "Information and Communication Technology-Enabled Modern Services Export Performances of Asian Economies," Asian Development Review, MIT Press, vol. 33(1), pages 1-27, March.
    4. Mr. Nikola Spatafora & Rahul Anand & Mr. Saurabh Mishra, 2012. "Structural Transformation and the sophistication of Production," IMF Working Papers 2012/059, International Monetary Fund.
    5. Mitra, Arup & Sharma, Chandan & Véganzonès-Varoudakis, Marie-Ange, 2014. "Trade liberalization, technology transfer, and firms’ productive performance: The case of Indian manufacturing," Journal of Asian Economics, Elsevier, vol. 33(C), pages 1-15.
    6. Baldwin, Richard & Forslid, Rikard, 2023. "Globotics and Development: When Manufacturing Is Jobless and Services Are Tradeable," World Trade Review, Cambridge University Press, vol. 22(3-4), pages 302-311, October.
    7. François Combarnous, 2003. "Le développement de l'humain comme préalable au développement économique : l'apport de l'analyse en composantes principales," Documents de travail 84, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    8. van der Marel, Erik, 2011. "Determinants of comparative advantage in services," LSE Research Online Documents on Economics 38993, London School of Economics and Political Science, LSE Library.
    9. Jedwab, Remi & Vollrath, Dietrich, 2015. "Urbanization without growth in historical perspective," Explorations in Economic History, Elsevier, vol. 58(C), pages 1-21.
    10. Ejaz Ghani & William R. Kerr & Christopher Stanton, 2014. "Diasporas and Outsourcing: Evidence from oDesk and India," Management Science, INFORMS, vol. 60(7), pages 1677-1697, July.
    11. M.A. Véganzonès-Varoudakis & H. T. M. Nguyen, 2018. "Investment climate, outward orientation and manufacturing firm productivity: new empirical evidence," Applied Economics, Taylor & Francis Journals, vol. 50(53), pages 5766-5794, November.
    12. Pravakar Sahoo & Ranjan Kumar Dash, 2017. "What Drives India's Surge in Service Exports?," The World Economy, Wiley Blackwell, vol. 40(2), pages 439-461, February.
    13. World Bank, 2012. "Consolidating and Accelerating Exports in Bangladesh : A Policy Agenda," World Bank Publications - Reports 11911, The World Bank Group.
    14. Sauvé, Pierre, 2014. "Towards a plurilateral Trade in Services Agreement (TISA): Challenges and prospects," Papers 683, World Trade Institute.
    15. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West (ed.), 2012. "Regional Cooperation for Inclusive and Sustainable Development: South and South-West Asia Development Report 2012-2013," SSWA Books and Research Reports, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office, number brr4, May.
    16. Marcus Noland & Donghyun Park & Gemma B. Estrada, 2012. "Developing the Services Sector as Engine of Growth for Asia: An Overview," Working Paper Series WP12-18, Peterson Institute for International Economics.
    17. Fakhri J. Hasanov & Jeyhun I. Mikayilov & Sabuhi Yusifov & Khatai Aliyev & Samra Talishinskaya, 2019. "The role of social and physical infrastructure spending in tradable and non-tradable growth," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 13(1), March.
    18. Marta C. N. Simões & Adelaide Duarte, 2013. "Human Capital and Growth in a Services Economy: the Case of Portugal," GEMF Working Papers 2013-21, GEMF, Faculty of Economics, University of Coimbra.
    19. Justin Yifu Lin & Célestin Monga & Samuel Standaert, 2019. "The Inclusive Sustainable Transformation Index," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 47-80, May.
    20. Johannes Schwarzer, 2016. "Trade and Employment. An Overview," Discussion Notes 1601, Council on Economic Policies.

    More about this item

    Keywords

    Ethiopia; service sector; decomposition; employment and Per capita GDP;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:khe:scajes:v:2:y:2016:i:4:p:139-156. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adi Sava (email available below). General contact details of provider: https://edirc.repec.org/data/ffucdro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.