Deconstructing the BRICs: Structural Transformation and Aggregate Productivity Growth

44 Pages Posted: 3 Feb 2012 Last revised: 21 Mar 2012

See all articles by Gaaitzen de Vries

Gaaitzen de Vries

University of Groningen

Abdul Azeez Erumban

Groningen Growth and Development Centre; The Conference Board

Marcel P. Timmer

University of Gronigen - Faculty of Economics

Ilya B. Voskoboynikov

National Research University Higher School of Economics; Groningen Growth and Development Centre

Harry X. Wu

Hong Kong Polytechnic University - School of Accounting and Finance

Date Written: February 2, 2012

Abstract

This paper studies structural transformation and its implications for productivity growth in the BRIC countries based on a new database that provides trends in value added and employment at a detailed 35-sector level. We find that for China, India and Russia reallocation of labour across sectors is contributing to aggregate productivity growth, whereas in Brazil it is not. However, this result is overturned when a distinction is made between formal and informal activities. Increasing formalization of the Brazilian economy since 2000 appears to be growth-enhancing, while in India the increase in informality after the reforms is growth-reducing.

Keywords: economic growth, new structural economics, structural change, BRIC countries

JEL Classification: C80, N10, O10

Suggested Citation

Vries, Gaaitzen de and Erumban, Abdul Azeez and Timmer, Marcel P. and Voskoboynikov, Ilya Borisovich and Wu, Harry X., Deconstructing the BRICs: Structural Transformation and Aggregate Productivity Growth (February 2, 2012). Higher School of Economics Research Paper No. WB BRP 04/EC/2011; Journal of Comparative Economics, 2012. Available at SSRN: https://ssrn.com/abstract=1998072 or http://dx.doi.org/10.2139/ssrn.1998072

Gaaitzen de Vries (Contact Author)

University of Groningen ( email )

P.O. Box 800
Groningen, Groningen 9747 AE
Netherlands

HOME PAGE: http://www.rug.nl/staff/g.j.de.vries/index

Abdul Azeez Erumban

Groningen Growth and Development Centre ( email )

Postbus 72
9700 AB Groningen
Netherlands

HOME PAGE: http://www.rug.nl/staff/a.a.erumban

The Conference Board ( email )

845 Third Avenue
New York, NY 10022
United States

Marcel P. Timmer

University of Gronigen - Faculty of Economics ( email )

Postbus 72
9700 AB Groningen
Netherlands

Ilya Borisovich Voskoboynikov

National Research University Higher School of Economics ( email )

Moscow

HOME PAGE: http://www.hse.ru/en/org/persons/503434

Groningen Growth and Development Centre

Postbus 72
Groningen
Netherlands

Harry X. Wu

Hong Kong Polytechnic University - School of Accounting and Finance ( email )

M715, Li Ka Shing Tower
Hung Hom, Kowloon, Kowloon
Hong Kong

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