Services in developing economies: The de-industrialization debate in perspective

Di Meglio, Gisela, Gallego, Jorge, Maroto, Andres and Savona, Maria (2017) Services in developing economies: The de-industrialization debate in perspective. Development and Change. ISSN 0012-155X

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Abstract

The article adds to the debate around the ‘premature deindustrialization’ of developing countries by analyzing the contribution of services to aggregate productivity and output growth within a Kaldorian framework. We revisit Kaldor´s Growth Laws (KGL) and empirically test them for a number of economic activities, including four service branches, across twenty-nine developing economies in Asia, Latin-America and Sub-Saharan Africa over three decades (1975-2005). Panel data estimations are complemented by a shift-share decomposition of labour productivity growth. We find support to the Kaldorian argument for both manufacturing and business services contribution to aggregate productivity growth. Conversely, other services slow down aggregate productivity and output growth. We suggest qualifying and repositioning the debate on premature deindustrialization within a broader reflection on the opportunities for development linked to structural change. We claim that these opportunities might include not only manufacturing sectors but also business services.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > SPRU - Science Policy Research Unit
Subjects: H Social Sciences
Depositing User: Tahir Beydola
Date Deposited: 14 Feb 2018 15:29
Last Modified: 14 Feb 2018 15:29
URI: http://sro.sussex.ac.uk/id/eprint/73590

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