Role of Services in Regional Economy Growth

24 Pages Posted: 11 Dec 2007

See all articles by David L. Kay

David L. Kay

Cornell University - College of Agricultural and Life Sciences

James E. Pratt

Cornell University - College of Agricultural and Life Sciences

Mildred Warner

Cornell University - Department of City & Regional Planning

Abstract

Although the final demand-oriented export base paradigm dominates economic development theory and practice, its usefulness is increasingly questioned because of the changing structure of modern economies, empirical critiques of export-led growth strategies, and studies that decompose the actual sources of growth. The importance of service industries, especially local services and their role in inducing economic growth, requires a measure that includes both forward and backward linkages to empirically account for the complete role of an industry. Using data for New York State, we demonstrate how the input-output-based method of hypothetical extraction can more appropriately measure the economic linkage of a broader range of contemporary economic sectors (including services) than traditional, final demand-induced, backward-linkage multipliers. Our analysis provides empirical support for greater economic development attention to be directed toward local services.

Suggested Citation

Kay, David L. and Pratt, James E. and Warner, Mildred, Role of Services in Regional Economy Growth. Growth and Change, Vol. 38, No. 3, pp. 419-442, September 2007, Available at SSRN: https://ssrn.com/abstract=1061866 or http://dx.doi.org/10.1111/j.1468-2257.2007.00377.x

David L. Kay (Contact Author)

Cornell University - College of Agricultural and Life Sciences ( email )

Ithaca, NY 14853
United States

James E. Pratt

Cornell University - College of Agricultural and Life Sciences ( email )

Ithaca, NY 14853
United States

Mildred Warner

Cornell University - Department of City & Regional Planning ( email )

106 West Sibley Hall
Ithaca, NY 14853
United States
607-255-6816 (Phone)

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