IDEAS home Printed from
   My bibliography  Save this paper

The Effects of Location and Sectoral Components of Growth


  • Asep Suryahadi


  • Daniel Suryadarma
  • Sudarno Sumarto


This study extends the literature on the relationship between economic growth and poverty reduction by differentiating growth and poverty into their sectoral compositions and locations. We find that growth in the rural services sector reduces poverty in all sectors and locations. However, in terms of elasticity of poverty, urban services growth has the largest for all sectors except urban agriculture. We also find that rural agriculture growth strongly reduces poverty in the rural agriculture sector, the largest contributor to poverty in Indonesia. This implies that the most effective way to accelerate poverty reduction is by focusing on rural agriculture and urban services growth. In the long run, however, the focus should be shifted to achieving robust overall growth in the services sector.

Suggested Citation

  • Asep Suryahadi & Daniel Suryadarma & Sudarno Sumarto, 2006. "The Effects of Location and Sectoral Components of Growth," Development Economics Working Papers 22550, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:develo:22550

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Block, Steven A., 1999. "Agriculture and economic growth in Ethiopia: growth multipliers from a four-sector simulation model," Agricultural Economics, Blackwell, vol. 20(3), pages 241-252, May.
    2. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, World Bank Group, vol. 10(1), pages 1-25, January.
    3. Bautista, Romeo M. & Thomas, Marcelle., 1998. "Agricultural growth linkages in Zimbabwe: income and equity effects," TMD discussion papers 31, International Food Policy Research Institute (IFPRI).
    4. Haggblade, Steven & Hazell, Peter & Brown, James, 1989. "Farm-nonfarm linkages in rural sub-Saharan Africa," World Development, Elsevier, vol. 17(8), pages 1173-1201, August.
    5. Lewis, John P., 1976. "The new economics of growth: A strategy for India and the developing world : John W. Mellor a twentieth century fund study (Cornell University Press, Ithaca, NY, 1976) pp. xv+335," Journal of Development Economics, Elsevier, vol. 3(4), pages 390-393, December.
    6. Simphiwe, N., 2001. "Prospects For Rural Growth? Measuring Growth Linkages In A South African Smallholder Farming Area," Working Papers 18027, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    7. Datt, Gaurav & Ravallion, Martin, 1998. "Why Have Some Indian States Done Better Than Others at Reducing Rural Poverty?," Economica, London School of Economics and Political Science, vol. 65(257), pages 17-38, February.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Andy Sumner, 2014. "Who are likely to be the future poor in Indonesia? Evidence on primary school non-completion from six rounds of the Demographic and Health Survey, 1991-2012," Working Papers in Economics and Development Studies (WoPEDS) 201406, Department of Economics, Padjadjaran University, revised May 2014.
    2. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS) 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
    3. Andy Sumner, 2013. "The Evolution Of Education And Health Poverty During Economic Development:The Case Of Indonesia, 1991–2007," Working Papers in Economics and Development Studies (WoPEDS) 201311, Department of Economics, Padjadjaran University, revised May 2013.

    More about this item


    economic growth; poverty; Urban; rural; Indonesia;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other


    Access and download statistics


    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:eab:develo:22550. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.