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Structural change and the ability to sustain growth

Author

Listed:
  • Foster-McGregor, Neil

    () (UNU-MERIT)

  • Kaba, Ibrahima

    () (UNU-MERIT)

  • Szirmai, Adam

    () (UNU-MERIT)

Abstract

This paper examines the relationships between structural characteristics and the ability to sustain growth. The analysis is based on a novel dataset of sectoral shares in GDP and growth rates for 108 countries from 1960 to 2010. Rather than focusing exclusively on average growth rates, the paper examines the characteristics of positive growth episodes. Dependent variables include the duration of positive growth episodes and the risk that such growth episodes come to an end. Structural characteristics include the degree of sectoral specialisation, the share of manufacturing and the share of the modern sector in GDP. We find that higher shares of manufacturing, high and increasing shares of the modern sector and a more diversified structure of production contribute to longer duration of growth episodes and reduced volatility of growth patterns. The effects of these same variables on average growth rates are much more ambiguous.

Suggested Citation

  • Foster-McGregor, Neil & Kaba, Ibrahima & Szirmai, Adam, 2015. "Structural change and the ability to sustain growth," MERIT Working Papers 048, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2015048
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    File URL: https://www.merit.unu.edu/publications/wppdf/2015/wp2015-048.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    economic growth; sustainable growth; growth rate; duration of growth; duration; volatility; specialisation; diversification; structure; structural change; structural transformation;

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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