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Factor Reallocation and Growth in Developing Countries

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  • Hélène Poirson
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    Abstract

    This paper examines the extent to which developing countries benefit from intersectoral factor transfers by specifying the impact and determinants of sectoral changes and of the degree of dualism (or allocation inefficiency) in a dual economy model. Conditions under which factor reallocation is growth-enhancing are derived. An empirical error-correction equation is estimated for 30 developing countries during 1965-80. Results suggest that labor reallocation effects are especially important in countries with high rates of investment (and thus high rates of labor transfer) and/or at low levels of development (and thus high degrees of dualism).

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 00/94.

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    Length: 29
    Date of creation: 01 Jun 2000
    Date of revision:
    Handle: RePEc:imf:imfwpa:00/94

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    Related research

    Keywords: Economic growth; Developing countries; Economic models; labor reallocation; labor productivities; labor productivity; gdp growth; labor force; labor market; growth rate; total factor productivity; growth rates; growth accounting; labor market policies; labor demand; labor productivity growth; labor market rigidities; laborers; skilled labor; neoclassical growth model; labor market institutions; labor market flexibility; growth model; labor force growth; labor markets; labor market segmentation;

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    Cited by:
    1. Junior Davis & Dirk Bezemer, 2005. "Key emerging and conceptual issues in the development of the rural non-farm economy in developing countries and transition economies," Development and Comp Systems 0510017, EconWPA.
    2. Jonathan Temple & Ludger Wößmann, 2006. "Dualism and cross-country growth regressions," Ifo Working Paper Series Ifo Working Paper No. 33, Ifo Institute for Economic Research at the University of Munich.
    3. Raiser, Martin & Schaffer, Mark E & Schuchhardt, Johannes, 2003. "Benchmarking Structural Change in Transition," IZA Discussion Papers 727, Institute for the Study of Labor (IZA).
    4. Boileau Loko & Mame Astou Diouf, 2009. "Revisiting the Determinants of Productivity Growth," IMF Working Papers 09/225, International Monetary Fund.
    5. Yusuf, Shahid, 2001. "Globalization and the challenge for developing countries," Policy Research Working Paper Series 2618, The World Bank.
    6. Escaith, Hubert, 2007. "Old and new dualisms in Latin America and Asia: labour productivity, international competitiveness and income distribution," MPRA Paper 14510, University Library of Munich, Germany, revised 2008.

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