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Services in Developing Economies: A new chance for catching-up?

Author

Listed:
  • Gisela Di Meglio

    (Department of Economic Analysis II Complutense University of Madrid, Spain)

  • Jorge Gallego

    (Department of Economic Analysis Autonomous University of Madrid, Spain.)

  • Andrés Maroto

    (Department of Economic Analysis Autonomous University of Madrid, Spain.)

  • Maria Savona

    (Science Policy Research Unit University of Sussex, UK.)

Abstract

The paper analyses the potential contribution of services as a driving force of economic growth in developing countries within a Kaldorian framework. In doing so, we revisit Kaldor Growth Laws and econometrically test them for a number of economic activities (including four service branches) across twenty-nine developing countries from Asia, Latin-America and Sub-Saharan Africa during a time span of three decades (1975-2005). Panel data estimations are complemented with a decomposition of labour productivity growth by means of a shift-share analysis. The results induce to question the traditional role posed to services as unlikely drivers of productivity growth in developing economies. As a matter of fact, business services seem to allow productivity growth by the same Kaldorian mechanisms that have traditionally made manufacturing the key driver of growth.

Suggested Citation

  • Gisela Di Meglio & Jorge Gallego & Andrés Maroto & Maria Savona, 2015. "Services in Developing Economies: A new chance for catching-up?," SPRU Working Paper Series 2015-32, SPRU - Science Policy Research Unit, University of Sussex Business School.
    • Handle: RePEc:sru:ssewps:2015-32
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    3. Adilson Giovanini & Wallace Marcelino Pereira & Kleverton Clóvis de Oliveira Saath, 2020. "Intermediate services’ impact on capital goods production [Contribuição dos serviços intermediários na produção de bens de capital]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 30(1), pages 203-230, January-A.
    4. Enrique Gilles & Marcel Vaillant, 2016. "Incorporation of services in natural resource-intensive goods: description and measurement of the phenomenon," Documentos de Trabajo EAN 15105, Universidad EAN.
    5. Maria Savona, 2018. "Industrial policy for a Europeanindustrial renaissance. A few reflections," SPRU Working Paper Series 2018-07, SPRU - Science Policy Research Unit, University of Sussex Business School.
    6. Yahya Z. ALSHEHHI & Jozsef POPP, 2017. "Sectoral Analysis: Growth Accounting Of Tertiary Industries," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 14, pages 221-230, August.
    7. Emily Cox, 2015. "Opening the Black Box of Energy Security: A Study of Conceptions of Electricity Security in the UK," SPRU Working Paper Series 2015-37, SPRU - Science Policy Research Unit, University of Sussex Business School.
    8. Marcelo Arend & Vinicius Zuniga Fagotti & Glaison Augusto Guerrero & Pedro Cezar Dutra Fonseca & Julimar da Silva Bichara, 2023. "Development strategies and path dependence: Institutional elements for making sense of Brazil's falling behind and South Korea's forging ahead," PSL Quarterly Review, Economia civile, vol. 76(305), pages 155-180.
    9. Dabús , Carlos & Delbianco, Fernando, 2021. "Economic Development and Structural Change: The Role of Services," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 46(3), pages 67-86, September.
    10. Valeriy V. Mironov & Liudmila D. Konovalova, 2019. "Structural changes and economic growth in the world economy and Russia," Russian Journal of Economics, ARPHA Platform, vol. 5(1), pages 1-26, April.
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    12. Abdur Rahman,Amanina Binti & Schmillen,Achim Daniel, 2020. "From Farms to Factories and Firms : Structural Transformation and Labor Productivity Growth in Malaysia," Policy Research Working Paper Series 9463, The World Bank.
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    14. Enrique Gilles & Marcel Vaillant, 2016. "Incorporation of services in Natural Resource-Intensive goods: description and measurement," Documentos de Trabajo EAN 15163, Universidad EAN.

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    More about this item

    Keywords

    structural change; growth; development; productivity; Kaldor;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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