IDEAS home Printed from https://ideas.repec.org/p/zbw/hohdps/232017.html
   My bibliography  Save this paper

Structural transformation and its relevance for economic growth in Sub-Saharan Africa

Author

Listed:
  • Busse, Matthias
  • Erdogan, Ceren
  • Mühlen, Henning

Abstract

In this paper, we analyse the role of structural transformation in view of the remarkable growth performance of sub-Saharan African countries since the mid-1990s. Our analysis covers 41 African countries over the period 1980 to 2014 and accounts for structural transformation by employing the analytical frameworks of (1) growth decomposition and (2) growth regression. Even though the low-productive agricultural sector continues to employ most of the African workforce, our results reveal that structural transformation has taken place and that it has contributed significantly to African growth in the past decades.

Suggested Citation

  • Busse, Matthias & Erdogan, Ceren & Mühlen, Henning, 2017. "Structural transformation and its relevance for economic growth in Sub-Saharan Africa," Hohenheim Discussion Papers in Business, Economics and Social Sciences 23-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    • Handle: RePEc:zbw:hohdps:232017
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/169364/1/898696895.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rodolfo E. Manuelli & Ananth Seshadri, 2014. "Human Capital and the Wealth of Nations," American Economic Review, American Economic Association, vol. 104(9), pages 2736-2762, September.
    2. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    3. Anke E. Hoeffler, 2002. "The augmented Solow model and the African growth debate," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(2), pages 135-158, May.
    4. Glewwe, Paul & Maïga, Eugénie & Zheng, Haochi, 2014. "The Contribution of Education to Economic Growth: A Review of the Evidence, with Special Attention and an Application to Sub-Saharan Africa," World Development, Elsevier, vol. 59(C), pages 379-393.
    5. McMillan, Margaret & Rodrik, Dani & Verduzco-Gallo, Íñigo, 2014. "Globalization, Structural Change, and Productivity Growth, with an Update on Africa," World Development, Elsevier, vol. 63(C), pages 11-32.
    6. Margaret McMillan & Kenneth Harttgen, 2014. "Working Paper - 209 - What is driving the African Growth Miracle," Working Paper Series 2145, African Development Bank.
    7. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
    8. Gaaitzen de Vries & Marcel Timmer & Klaas de Vries, 2015. "Structural Transformation in Africa: Static Gains, Dynamic Losses," Journal of Development Studies, Taylor & Francis Journals, vol. 51(6), pages 674-688, June.
    9. Philippe Aghion & Steven Durlauf (ed.), 2014. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 2, number 2.
    10. World Bank, 2016. "World Development Indicators 2016," World Bank Publications - Books, The World Bank Group, number 23969, December.
    11. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    12. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    13. Suzanne McCoskey, 2002. "Convergence in Sub-Saharan Africa: a nonstationary panel data approach," Applied Economics, Taylor & Francis Journals, vol. 34(7), pages 819-829.
    14. Daron Acemoglu & James Robinson, 2010. "The Role of Institutions in Growth and Development," Review of Economics and Institutions, Università di Perugia, vol. 1(2).
    15. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    16. Jonathan Temple & Ludger Wößmann, 2006. "Dualism and cross-country growth regressions," Journal of Economic Growth, Springer, vol. 11(3), pages 187-228, September.
    17. N. Gregory Mankiw & David Romer & David Weil, 1990. "A Contribution to the Empirics of Economic Growth," Working Papers 1990-24, Brown University, Department of Economics.
    18. Hoeffler, Anke E, 2002. "The Augmented Solow Model and the African Growth Debate," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(2), pages 135-158, May.
    19. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    20. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    21. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    22. Margaret S. McMillan & Kenneth Harttgen, 2014. "What is driving the 'African Growth Miracle'?," NBER Working Papers 20077, National Bureau of Economic Research, Inc.
    23. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    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. Escobar, Octavio & Mühlen, Henning, 2019. "Decomposing a decomposition: Within-country differences and the role of structural change in productivity growth," Hohenheim Discussion Papers in Business, Economics and Social Sciences 05-2019, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    2. Rekha Ravindran & Suresh Babu Manalaya, 2023. "Does Premature Deindustrialisation Stall Growth? Evidence from Sub-Saharan Africa," Progress in Development Studies, , vol. 23(1), pages 65-81, January.

    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. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    2. Matthias Busse & Ceren Erdogan & Henning Mühlen, 2016. "China's Impact on Africa – The Role of Trade, FDI and Aid," Kyklos, Wiley Blackwell, vol. 69(2), pages 228-262, May.
    3. John Knight & Sai Ding, 2008. "Can the Augmented Solow Model Explain China's Economic Growth? A Cross-Country Panel Data Analysis," Economics Series Working Papers 380, University of Oxford, Department of Economics.
    4. Alexandre, Fernando & Bação, Pedro & Veiga, Francisco José, 2022. "The political economy of productivity growth," European Journal of Political Economy, Elsevier, vol. 75(C).
    5. Thomas Gries & Rainer Grundmann, 2020. "Modern sector development: The role of exports and institutions in developing countries," Review of Development Economics, Wiley Blackwell, vol. 24(2), pages 644-667, May.
    6. Grundmann, Rainer & Gries, Thomas, 2015. "Crucial for Modern Sector Development? The Role of Exports and Institutions in Developing Countries," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112962, Verein für Socialpolitik / German Economic Association.
    7. Teixeira, Aurora A.C. & Queirós, Anabela S.S., 2016. "Economic growth, human capital and structural change: A dynamic panel data analysis," Research Policy, Elsevier, vol. 45(8), pages 1636-1648.
    8. Bayraktar-Sağlam, Bahar & Yetkiner, Hakan, 2014. "A Romerian contribution to the empirics of economic growth," Journal of Policy Modeling, Elsevier, vol. 36(2), pages 257-272.
    9. Ding, Sai & Knight, John, 2009. "Can the augmented Solow model explain China's remarkable economic growth? A cross-country panel data analysis," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 432-452, September.
    10. Max Kohler & Stefan Sperlich & Jisu Yoon, 2019. "A Varying Coefficient Model for Assessing the Returns to Growth to Account for Poverty and Inequality," Papers 1903.02390, arXiv.org.
    11. Oleg Badunenko & Daniel Henderson & Romain Houssa, 2014. "Significant drivers of growth in Africa," Journal of Productivity Analysis, Springer, vol. 42(3), pages 339-354, December.
    12. Bloom, David E. & Canning, David & Kotschy, Rainer & Prettner, Klaus & Schünemann, Johannes, 2024. "Health and economic growth: Reconciling the micro and macro evidence," World Development, Elsevier, vol. 178(C).
    13. Matthieu Charpe, 2023. "Convergence heterogeneity at the local level in sub‐Saharan Africa," Papers in Regional Science, Wiley Blackwell, vol. 102(2), pages 273-305, April.
    14. Rainer Kotschy & Uwe Sunde & Tommaso MonacelliManaging Editor, 2018. "Can education compensate the effect of population ageing on macroeconomic performance?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 33(96), pages 587-634.
    15. Hauk, William R., 2017. "Endogeneity bias and growth regressions," Journal of Macroeconomics, Elsevier, vol. 51(C), pages 143-161.
    16. Ryan H. Murphy & Colin O’Reilly, 2019. "Applying panel vector autoregression to institutions, human capital, and output," Empirical Economics, Springer, vol. 57(5), pages 1633-1652, November.
    17. Ahmad, Mahyudin & Marwan, Nur Fakhzan, 2012. "Economic growth and institutions in developing countries: Panel evidence," MPRA Paper 42293, University Library of Munich, Germany.
    18. Ahmad, Mahyudin & Hall, Stephen G., 2012. "Do institutions matter for growth? Evidence from East Asian countries," MPRA Paper 42158, University Library of Munich, Germany.
    19. Silberberger, Magdalene & Königer, Jens, 2016. "Regulation, trade and economic growth," Economic Systems, Elsevier, vol. 40(2), pages 308-322.
    20. Rok Spruk, 2019. "The rise and fall of Argentina," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-40, December.

    More about this item

    Keywords

    Sub-Saharan Africa; structural transformation; economic growth; growth regressions; dualistic approach;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:hohdps:232017. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwhohde.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.