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The Distribution Sector and the Development Process: are there Patterns? Yes

  • James H. Anderson

    ()

    (World Bank, 1818 H Street NW, Washington, DC 20433.)

Using an increasing returns specification for distribution, an inverted U pattern between the share of distribution in gross domestic product and the level of development is shown to arise. A cross-section time-series data set is constructed and merged with one used to analyze the service sector. In contrast to the rising pattern found for services, an average time-series relation that exhibits an inverted U pattern is established. The empirical results are robust, for example, to choice of functional form and country and time period coverage. A similar pattern is found in the average cross-section (country) relation between distribution and development. Copyright 2002, Oxford University Press.

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Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 40 (2002)
Issue (Month): 2 (April)
Pages: 166-176

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Handle: RePEc:oup:ecinqu:v:40:y:2002:i:2:p:166-176
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  1. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
  2. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
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  8. Betancourt, Roger R. & Gautschi, David, 1992. "The demand for retail products and the household production model : New views on complementarity and substitutability," Journal of Economic Behavior & Organization, Elsevier, vol. 17(2), pages 257-275, March.
  9. Walter Y. Oi, 1992. "Productivity in the Distributive Trades: The Shopper and the Economies of Massed Reserves," NBER Chapters, in: Output Measurement in the Service Sectors, pages 161-193 National Bureau of Economic Research, Inc.
  10. Bardhan, Pranab, 1996. "Disparity in wages but not in returns to capital between rich and poor countries," Journal of Development Economics, Elsevier, vol. 49(1), pages 257-270, April.
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  12. Roger Betancourt & Margaret Malanoski, 1999. "An Estimable Model of Supermarket Behavior: Prices, Distribution Services and Some Effects of Competition," Empirica, Springer, vol. 26(1), pages 55-73, March.
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