Does Premature Deindustrialization Matter? The Role of Manufacturing versus Services in Development

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Gaurav Nayyar ◽  
Marcio Cruz ◽  
Linghui Zhu
Keyword(s):  
Productivity Growth ◽  
Service Sector ◽  
Value Added ◽  
Unskilled Labor ◽  
High Productivity ◽  
Services Sector ◽  
Cross Country ◽  
Lower Income Countries ◽  
Statistical Artifact

Abstract “Premature deindustrialization” typically reflects the fact that the services sector has grown faster than manufacturing at lower levels of per capita income compared to the past. This paper, based on cross-country data, shows that the rising share of services is largely not driven by a statistical artifact whereby what was earlier subsumed in manufacturing value added is now accounted for as service sector contributions. Yet, this matters less for development opportunities because features of manufacturing that were thought of as uniquely special for productivity growth are also shared by some services. And the growth of these high-productivity services is not closely linked to a manufacturing base as it draws on both intermediate demand from other sectors as well as final demand from home and abroad. The prospect of services-led development in lower-income countries however, is limited by the fact that a given service subsector is unlikely to provide opportunities for productivity growth and job creation for unskilled labor simultaneously.

The Service Sector in the Economy in Poland and European Union Countries

2015 ◽  
Vol 10 (3) ◽  
pp. 191-207
Author(s):  
Walentyna Kwiatkowska
Keyword(s):  
Service Sector ◽  
Value Added ◽  
Total Employment ◽  
Eu Countries ◽  
Gross Value Added ◽  
European Union Countries ◽  
Service Sectors ◽  
Sector Theory ◽  
The Eu

The role of the service sector in the economy is increasing in the process of socio-economic development. This tendency has been confirmed and explained by the three-sector theory formulated by A.G.B. Fisher, C. Clark, and J. Fourastie. The main goal of the paper is to show development tendencies in service sectors in Poland and the EU countries and assess them in view of the three-sector theory. The share of the service sector in the total employment and in the total gross value added in the years 2005-2013/2014 will be analysed together with two sub-sectors including market and non-market services. The research shows that the share of the service sector in total employment and total gross value added has been recently increasing in Poland as well as in other EU countries, but there is a gap in this process between Poland and the most developed EU countries. Moreover, in Poland, the role of market services has been recently increasing much faster than the role of non-market services. 

scholarly journals Services Sector in Lithuania: Labour Productivity as a Factor of Growth

Ekonomika ◽  
2008 ◽  
Vol 81 ◽  
Author(s):  
Jolanta Žemgulienė
Keyword(s):  
Growth Rate ◽  
Comparative Analysis ◽  
Productivity Growth ◽  
Labour Productivity ◽  
Value Added ◽  
Service Industries ◽  
Services Sector ◽  
Labour Productivity Growth ◽  
Empirical Regularities ◽  
The Relationship

This paper examines the tendencies of Lithuanian services sector’s value added and labour productivity during 1995-2006. Comparative analysis of the average annual labour productivity growth in manufacturing and service industries reveals arguments supporting the W. Baumol’s consideration that there can be sporadic productivity increases in nonprogressive sectors. During 1995-2000, labour productivity growth in services exceeded productivity growth in manufacturing. The paper offers an interpretation of the Verdoom law for empirical regularities of the relationship between the cross-sectorial labour productivity growth rate and the value added growth rate.

scholarly journals The Role of Agricultural Sector Productivity in Economic Growth: The Case of Iran’s Economic Development Plan

2018 ◽  
Vol 10 (1) ◽  
pp. 16 ◽  
Author(s):  
Morteza Tahamipour ◽  
Mina Mahmoudi
Keyword(s):  
Economic Development ◽  
Total Factor Productivity ◽  
Productivity Growth ◽  
Agricultural Sector ◽  
Value Added ◽  
Total Factor Productivity Growth ◽  
Development Plan ◽  
Factor Productivity ◽  
Economic Development Plan

This study provides the theoretical framework and empirical model for productivity growth evaluations in agricultural sector as one of the most important sectors in Iran’s economic development plan. We use the Solow residual model to measure the productivity growth share in the value-added growth of the agricultural sector. Our time series data includes value-added per worker, employment, and capital in this sector. The results show that the average total factor productivity growth rate in the agricultural sector is -0.72% during 1991-2010. Also, during this period, the share of total factor productivity growth in the value-added growth is -19.6%, while it has been forecasted to be 33.8% in the fourth development plan. Considering the effective role of capital in the agricultural low productivity, we suggest applying productivity management plans (especially in regards of capital productivity) to achieve future growth goals.

scholarly journals The World Technology Frontier

2006 ◽  
Vol 96 (3) ◽  
pp. 499-522 ◽  
Author(s):  
Francesco Caselli ◽  
Wilbur John Coleman
Keyword(s):  
Skilled Labor ◽  
Simple Explanation ◽  
Unskilled Labor ◽  
Skilled Workers ◽  
Poor Countries ◽  
Aggregate Production Function ◽  
Unskilled Workers ◽  
Cross Country ◽  
Rich Countries ◽  
Lower Income Countries

We study cross-country differences in the aggregate production function when skilled and unskilled labor are imperfect substitutes. We find that there is a skill bias in cross-country technology differences. Higher-income countries use skilled labor more efficiently than lower-income countries, while they use unskilled labor relatively and, possibly, absolutely less efficiently. We also propose a simple explanation for our findings: rich countries, which are skilled-labor abundant, choose technologies that are best suited to skilled workers; poor countries, which are unskilled-labor abundant, choose technologies more appropriate to unskilled workers. We discuss alternative explanations, such as capital-skill complementarity and differences in schooling quality.

MACROECONOMIC EFFECTS OF GREATER COMPETITION IN THE SERVICE SECTOR: THE CASE OF ITALY

2010 ◽  
Vol 14 (5) ◽  
pp. 677-708 ◽  
Author(s):  
L. Forni ◽  
A. Gerali ◽  
M. Pisani
Keyword(s):  
Euro Area ◽  
Service Sector ◽  
Monopolistic Competition ◽  
Spillover Effects ◽  
Dynamic Stochastic General Equilibrium ◽  
Services Sector ◽  
Long Run ◽  
Dynamic Stochastic ◽  
Nontradable Goods ◽  
Cross Country

In this paper we assess the effects of increasing competition in the service sector in one country of the euro area. We focus on Italy, which, based on cross-country comparisons, stands out as the country with the highest markups in nonmanufacturing industries among the OECD countries. We propose a two-region (Italy and the rest of the euro area) dynamic stochastic general equilibrium model where we introduce nontradable goods as a proxy for services and we allow for monopolistic competition in labor, manufacturing, and services markets. We then use the model to simulate the macroeconomic and spillover effects of increasing the degree of competition in the Italian services sector. According to the results, reducing the markups in services to the levels prevailing in the rest of the euro area induces in the long run an increase in Italian GDP equal to 11% and an increase in welfare (measured in terms of steady state consumption equivalents) of about 3.5%. Half of the GDP increase would be realized in the first three years. The spillover effects to the rest of the euro area are limited: consumption, investment, and GDP increases are relatively small.

scholarly journals THE ANALYSIS OF ECONOMIC POTENTIAL IN NORTH SUMATERA PROVINCE

2019 ◽  
Vol 8 (2) ◽  
pp. 1
Author(s):  
Ahmad Habibi Harahap ◽  
Eko Wahyu Nugrahadi
Keyword(s):  
Economic Growth ◽  
Structural Transformation ◽  
Service Sector ◽  
Agricultural Sector ◽  
Economic Sectors ◽  
Growth Ratio ◽  
Services Sector ◽  
Agriculture Sector ◽  
The North

Economic growth of North Sumatera Province is not quite on the top of optimum. If the compared by some of others province in Indonesia and by  all of his potention, the North Sumatera Province only on the 10th rank of economic growth in Indonesia in 2009-2013 period. The purpose of this study is toanalyze the economic sectors which are the basis in each district/city in North Sumatera province and to determine the structure of economic growth in the district /city both sectoral and aggregate the province of North Sumatera. Structural transformation to some extent will have an impact on overall economic growth. Analysis tools used in this study is Location Quetiont (LQ), Growth Ratio Model (MRP), overlay analysis, and shift share analysis. Results of this study showed that the agriculture sector is a sector which is the basis in nearly 13 districts/cities in North Sumatera Province. But the growth in agriculture, processing industries, mining and quarrying, and the electricity, gas & water supply sector likely slowed, otherwise all tertiary sectors which include: trade, hotels, and restaurants; transportation and communication, finance, leasing, and services company, and the services sector is likely to experience growth positive. Transportation and communication is a sector with the highest growth occurring in North Sumatera Province. Shift Share Analysis results showed that in the Province of North Sumatera is going structural transformation characterized by decreasing the role of the agricultural sector, and the increasing role of the service sector. This condition as well as contrary to the Kuznets theory which states that the process of structural transformation contribution marked by shifting agriculture to manufacturing and then to services sector.

scholarly journals Services value added in exports: a comparative analysis between Brazil and the United Kingdom from 2000 to 2014

2021 ◽  
Author(s):  
◽  
Joyce Aparecida Guimarães Silva
Keyword(s):  
United Kingdom ◽  
Comparative Analysis ◽  
Service Sector ◽  
Value Added ◽  
Intermediate Input ◽  
The United Kingdom ◽  
Service Sectors ◽  
Latent Potential ◽  
International Services

In the last few years, it is observed a rise in the service sector in countries and an increase in international services transactions has accompanied this expansion. Thus, the main objective of this work is to measure the services value added in exports from Brazil and the United Kingdom, from 2000 to 2014, and do a comparative analysis to identify the role of services systemically. The results indicate a clear difference among the countries analysed with regard to exports in the service sector, while for Brazil the sector can be considered as an intermediate input for exports from the non-service sectors; to the United Kingdom, as final exported product. Also, it is concluded that the service sector has been gaining space and importance for the Brazilian economy, indicating a latent potential of the sector in promoting the country's economic growth and, therefore, cannot be treated as a secondary player by public policies of development.

Development of services in selected countries in the world

2015 ◽  
Vol 60 (10) ◽  
pp. 75-84
Author(s):  
Agata Szczukocka
Keyword(s):  
Comparative Analysis ◽  
Research And Development ◽  
Service Sector ◽  
Statistical Data ◽  
Value Added ◽  
Services Sector ◽  
Gross Value Added ◽  
The World ◽  
Similarities And Differences ◽  
Intensive Development

Intensive development of the service sector (as evidenced by economic indicators, such as gross value added and employment levels) pointed out the similarities and differences existing in the world. The study used statistical data on gross value added, employed, exports and imports of services and spending on research and development. To conduct a comparative analysis Ward methods and multidimensional scaling were used. The application of these methods made it possible to isolate groups of countries are similar in terms of the development of the services sector and the countries in which this development is significantly different from the others.

scholarly journals Nationwide Lockdown, Population Density, and Financial Distress Brings Inadequacy to Manage COVID-19: Leading the Services Sector into the Trajectory of Global Depression

Healthcare ◽  
2021 ◽  
Vol 9 (2) ◽  
pp. 220
Author(s):  
Donglei Yu ◽  
Muhammad Khalid Anser ◽  
Michael Yao-Ping Peng ◽  
Abdelmohsen A. Nassani ◽  
Sameh E. Askar ◽  
...  
Keyword(s):  
Social Services ◽  
Service Sector ◽  
Aggregate Demand ◽  
Value Added ◽  
Food Prices ◽  
Economic Policies ◽  
Social Distancing ◽  
Services Sector ◽  
Ex Post ◽  
Services Industry

The service industry provides distributive services, producer services, personal services, and social services. These services largely breakdowns due to restrictions on border movements, confined travel and transportation services, a decline in international tourists’ visitation, nationwide lockdowns, and maintaining social distancing in the population. Although these measures are highly needed to contain coronavirus, it decreases economic and financial activities in a country, which requires smart solutions to globally subsidize the services sector. The study used different COVID-19 measures, and its resulting impact on the services industry by using world aggregated data from 1975 through 2020. The study benefited from the Keynesian theory of aggregate demand that remains provided a solution to minimize economic shocks through stringent or liberalizing economic policies. The COVID-19 pandemic is more severe than the financial shocks of 2018 that affected almost all sectors of the globalized world, particularly the services sector, which has been severally affected by COVID-19; it is a high time to revisit economic policies to control pandemic recession. The study used quantiles regression and innovation accounting matrix to obtain ex-ante and ex-post analysis. The quantile regression estimates show that causes of death by communicable diseases, including COVID-19, mainly decline the share of services value added to the global GDP at different quantiles distribution. In contrast, word-of-mouth helps to prevent it from the transmission channel of coronavirus plague through information sharing among the general masses. The control of food prices and managing physical distancing reduces suspected coronavirus cases; however, it negatively affects the services sector’s value share. The smart lockdown and sound economic activities do not decrease coronavirus cases, while they support increasing the percentage of the services sector to the global GDP. The innovation accounting matrix suggested that smart lockdown, managing physical distancing, effective price control, and sound financial activities will help to reduce coronavirus cases that will further translate into increased services value-added for the next ten years. The social distancing will exert a more considerable variance error shock to the services industry, which indicates the viability of these measures to contained novel coronavirus over a time horizon. The study used the number of proxies to the COVID-19 measures on the service sector that can be continued with real-time variables to obtain more inferences.

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