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Benchmarking Structural Transformation Across the World

Author

Listed:
  • Era Dabla-Norris
  • Alun H. Thomas
  • Rodrigo Garcia-Verdu
  • Yingyuan Chen

Abstract

This paper documents stylized facts on the process of structural transformation around the world and empirically analyzes its determinants using data on real value added by sector of economic activity (agriculture, manufacturing and services) for a panel of 168 countries over the period 1970-2010. The analysis points to large differences in sector shares both across and within regions as well as for countries at similar levels of economic development. Using both linear and quantile regression methods, it finds that a large proportion of the cross-country variation in sector shares can be accounted for by country characteristics, such as real GDP per capita, demographic structure, and population size. It also finds that policy and insitutional variables, such as product market reforms, openness to trade, human and physical capital, and finance improve the baseline model’s ability to account for the variation in sectoral shares across countries.

Suggested Citation

  • Era Dabla-Norris & Alun H. Thomas & Rodrigo Garcia-Verdu & Yingyuan Chen, 2013. "Benchmarking Structural Transformation Across the World," IMF Working Papers 13/176, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:13/176
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    References listed on IDEAS

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    1. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    2. Bernstein, Jeffrey R. & Weinstein, David E., 2002. "Do endowments predict the location of production?: Evidence from national and international data," Journal of International Economics, Elsevier, vol. 56(1), pages 55-76, January.
    3. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 129-173.
    4. Daron Acemoglu & Veronica Guerrieri, 2008. "Capital Deepening and Nonbalanced Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 467-498, June.
    5. Peter K. Schott, 2003. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production," American Economic Review, American Economic Association, vol. 93(3), pages 686-708, June.
    6. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
    7. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941 Elsevier.
    8. Buera, Francisco J. & Kaboski, Joseph P., 2012. "Scale and the origins of structural change," Journal of Economic Theory, Elsevier, vol. 147(2), pages 684-712.
    9. Stephen Nickell & Stephen Redding & Joanna Swaffield, 2008. "The Uneven Pace of Deindustrialisation in the OECD," The World Economy, Wiley Blackwell, vol. 31(9), pages 1154-1184, September.
    10. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-452, May.
    11. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, January.
    12. Alessandro Prati & Massimiliano Gaetano Onorato & Chris Papageorgiou, 2013. "Which Reforms Work and under What Institutional Environment? Evidence from a New Data Set on Structural Reforms," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 946-968, July.
    13. El-hadj M. Bah, 2011. "Structural Transformation Paths Across Countries," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 5-19, May.
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    Citations

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    Cited by:

    1. Pierre-Richard Agénor, 2017. "Caught In The Middle? The Economics Of Middle-Income Traps," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 771-791, July.
    2. Era Dabla-Norris & Giang Ho & Annette J Kyobe, 2016. "Structural Reforms and Productivity Growth in Emerging Market and Developing Economies," IMF Working Papers 16/15, International Monetary Fund.
    3. Raghbendra Jha & Sadia Afrin, 2016. "Pattern and determinants of structural transformation in Africa," Departmental Working Papers 2016-01, The Australian National University, Arndt-Corden Department of Economics.
    4. Daniel A Dias & Christine J. Richmond & Carlos Robalo Marques, 2016. "A Tale of Two Sectors; Why is Misallocation Higher in Services than in Manufacturing?," IMF Working Papers 16/220, International Monetary Fund.
    5. Romina Kazandjian & Lisa L Kolovich & Kalpana Kochhar & Monique Newiak, 2016. "Gender Equality and Economic Diversification," IMF Working Papers 16/140, International Monetary Fund.
    6. Jan Trenczek, 2016. "Promoting Growth-Enhancing Structural Change: Evidence from a Panel of African, Asian, and Latin American Countries," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 207, Courant Research Centre PEG.
    7. repec:taf:oxdevs:v:44:y:2016:i:4:p:384-400 is not listed on IDEAS
    8. Bill Battaile & Saurabh Mishra, 2015. "Transforming Non-Renewable Resource Economies (NREs)," IMF Working Papers 15/171, International Monetary Fund.
    9. Raghbendra Jha & Sadia Afrin, 2016. "Structural transformation in South Asia," ASARC Working Papers 2016-01, The Australian National University, Australia South Asia Research Centre.
    10. Pierre-Richard AGENOR, 2016. "Caught in the Middle? The Economics of Middle-Income Traps," Working Papers P142, FERDI.

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