Services in Developing Economies: A New Chance for Catching-Up?

36 Pages Posted: 8 Mar 2016

See all articles by Gisela di Meglio

Gisela di Meglio

Universidad Complutense de Madrid (UCM)

Jorge Gallego

Universidad Autónoma de Madrid

Andres Maroto

Universidad Autónoma de Madrid

Maria Savona

University of Sussex

Date Written: November 19, 2015

Abstract

The paper analyses the potential contribution of services as a driving force of economic growth in developing countries within a Kaldorian framework. In doing so, we revisit Kaldor Growth Laws and econometrically test them for a number of economic activities (including four service branches) across twenty-nine developing countries from Asia, Latin-America and Sub-Saharan Africa during a time span of three decades (1975-2005). Panel data estimations are complemented with a decomposition of labour productivity growth by means of a shift-share analysis. The results induce to question the traditional role posed to services as unlikely drivers of productivity growth in developing economies. As a matter of fact, business services seem to allow productivity growth by the same Kaldorian mechanisms that have traditionally made manufacturing the key driver of growth.

Keywords: structural change, growth, development, productivity, Kaldor

JEL Classification: L16, O14, O47, C23

Suggested Citation

di Meglio, Gisela and Gallego, Jorge and Maroto, Andres and Savona, Maria, Services in Developing Economies: A New Chance for Catching-Up? (November 19, 2015). SWPS 2015-32. Available at SSRN: https://ssrn.com/abstract=2744647 or http://dx.doi.org/10.2139/ssrn.2744647

Gisela Di Meglio (Contact Author)

Universidad Complutense de Madrid (UCM) ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain

Jorge Gallego

Universidad Autónoma de Madrid ( email )

Calle Francisco Tomás y Valiente, 5
Madrid, 28049
Spain

Andres Maroto

Universidad Autónoma de Madrid ( email )

Campus Cantoblanco
C/Kelsen, 1
Madrid, Madrid 28049
Spain

Maria Savona

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

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