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Growth and the Services Sector: The Portugal Case

In: Contemporary Issues in the Integration Processes of Western Balkan Countries in the European Union

Author

Listed:
  • Marta S. S. Ramos

    (University of Coimbra, Faculty of Economics)

  • Marta C. N. Simoes

    (University of Coimbra, Faculty of Economics)

Abstract

Does the increasing tertiarisation of an economy have the potential to sustain its growth rate? This work aims at contributing to this debate from a Portuguese perspective by conducting a characterization of the services sector in Portugal for the period 1970-2005/8. We first analyze the services sector as a whole, and then consider different sub-sectors based on the division of this sector into two broad categories, modern impersonal services and traditional personal services. At the aggregate level, the productivity performance of the Portuguese services sector is low relative to that of selected more advanced countries. This is due to the strong weight of traditional services. However, modern services show a great potential to increase its productivity and participation in international trade. Portugal should thus focus on the development of transport and communications and finance and business services sub-sectors in order to overcome the negative productivity and standards of living differentials relative to most of our European partners. Decisio makers should also not forget that there is ample scope for some traditional services to benefit from recent technological advances and thus turning into modern services.

Suggested Citation

  • Marta S. S. Ramos & Marta C. N. Simoes, 2011. "Growth and the Services Sector: The Portugal Case," Book Chapters, in: Stefan Bogdan Salej & Dejan Eric & Srdjan Redzepagic & Ivan Stosic (ed.), Contemporary Issues in the Integration Processes of Western Balkan Countries in the European Union, chapter 17, pages 271-287, Institute of Economic Sciences.
    • Handle: RePEc:ibg:chaptr:conissue-17
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Structural change; services sector; productivity; economic growth;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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