Structural change, labor productivity growth, and convergence of BRIC countries
In this study, we seek to understand the patterns of structural change, labor productivity growth and convergence in BRIC countries. In the first part, we employ the dataset of labor productivity from de Vries et al. (2012) and the Groningen Growth and Development Center (2013) and utilize the shift and share analysis to investigate the contribution of within shift, static shift and dynamic shift effects on growth of labor productivity. In the second part, we use the convergence tests to check for the cross-country convergence in each economic sector. Our aggregate shift-share decomposition results report that labor productivity growth within sector itself is the main source of aggregate growth, while an effect of labor movement exists (shift effect) but not substantial. Among BRIC, we found that, during 1980-2008, China had the highest rate of labor productivity growth, following by India, Russia, and Brazil, respectively. The results of the convergence analysis show that service sectors in BRICs have faster catching-up rates than industrial sectors, and there is no convergence in agriculture. Among service sectors, financial, insurance, and real estate sector has highest speed of convergence. The BRICs results are then used to compare with the four OECD countriesf results. It is found that in OECD countries, the sectors that converge fastest are mining and finance, insurance, and real estate. Nevertheless, the magnitudes of speed of convergence in OECDs are not comparable to BRICs. This confirms the growth theory in that less developed countries converge faster than developed nations. In sum, our findings imply that service sectors are the driving force of economic growth and economic convergence in BRICs.
|Date of creation:||Aug 2013|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.hiroshima-u.ac.jp/en/idec/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barry Bosworth & Susan M. Collins, 2007.
"Accounting for Growth: Comparing China and India,"
NBER Working Papers
12943, National Bureau of Economic Research, Inc.
- McMillan, Margaret & Rodrik, Dani, 2012.
"Globalization, structural change, and productivity growth:,"
IFPRI discussion papers
1160, International Food Policy Research Institute (IFPRI).
- Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
- Peneder, Michael, 2003.
"Industrial structure and aggregate growth,"
Structural Change and Economic Dynamics,
Elsevier, vol. 14(4), pages 427-448, December.
- de Vries, Gaaitzen J. & Erumban, Abdul A. & Timmer, Marcel P. & Voskoboynikov, Ilya & Wu, Harry X., 2012.
"Deconstructing the BRICs: Structural transformation and aggregate productivity growth,"
Journal of Comparative Economics,
Elsevier, vol. 40(2), pages 211-227.
- Gaaitzen J. de Vries & Abdul A. Erumban & Marcel P. Timmer & Ilya B. Voskoboynikov & Harry X. Wu, 2011. "Deconstructing The BRICs: Structural Transformation And Aggregate Productivity Growth," HSE Working papers WP BRP 04/EC/2011, National Research University Higher School of Economics.
- Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-38, December.
- Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-98, June.
- Dale W. Jorgenson & Marcel P. Timmer, 2011. "Structural Change in Advanced Nations: A New Set of Stylised Facts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 1-29, 03.
- Timmer, Marcel P. & Szirmai, Adam, 2000. "Productivity growth in Asian manufacturing: the structural bonus hypothesis examined," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 371-392, December.
- Boussemart, Jean-Philippe & Briec, Walter & Cadoret, Isablelle & Tavera, Christophe, 2006. "A re-examination of the technological catching-up hypothesis across OECD industries," Economic Modelling, Elsevier, vol. 23(6), pages 967-977, December.
When requesting a correction, please mention this item's handle: RePEc:hir:idecdp:3-5. 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: (Keisuke Kawata)
If references are entirely missing, you can add them using this form.