A new interpretation of Kaldor's first growth law for open developing economies

Pacheco‐López, Penélope; Thirlwáll, A. P.

doi:10.4337/roke.2014.03.07

Cited by 27 publications

(18 citation statements)

References 15 publications

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“…The fundamental role played by manufacturing as a source of growth in developing countries is shown, among others, by Felipe () across five Southeast Asian countries, by Cimoli et al. () and Libanio and Moro () across five and seven Latin American economies, respectively, and by Pacheco and Thirwall () for 89 developing economies. However, given the traditional picture of services as a structural burden for economies, the literature has mostly overlooked non‐manufacturing sectors (Ocampo, ), while the few studies that focus on services mainly account for the aggregate sector.…”

Section: Introductionmentioning

confidence: 81%

Services in Developing Economies: The Deindustrialization Debate in Perspective

Meglio¹,

Gallego²,

Maroto³

et al. 2018

Development and Change

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This study contributes to the debate on the premature deindustrialization of developing countries by analysing the contribution of services to aggregate productivity and output growth within a Kaldorian framework. The article revisits Kaldor's Growth Laws and empirically tests them for a number of economic activities, including four service branches across 29 developing economies in Asia, Latin America and sub-Saharan Africa over three decades . Panel data estimations are complemented by a shiftshare decomposition of labour productivity growth. The findings support the Kaldorian argument for both manufacturing and business services' contribution to aggregate productivity growth. Conversely, other services slow down aggregate productivity and output growth. The authors suggest qualifying and repositioning the debate on premature deindustrialization within a broader reflection on the opportunities for development linked to structural change. The analysis claims that these opportunities might include not only manufacturing sectors, but also business services.1. See Romero (2016) for a review.

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Section: Introductionmentioning

confidence: 81%

Services in Developing Economies: The Deindustrialization Debate in Perspective

Meglio¹,

Gallego²,

Maroto³

et al. 2018

Development and Change

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show abstract

“…So promoting the development of the industrial sector can be a key to achieving sustainable development. It is indeed now well established in the growth and development literature that there is as strong relation between the growth of manufacturing output and the growth of GDP [1] (Pacheco-lopez ad thirlwall, 2013).…”

Section: Background Of the Studymentioning

confidence: 99%

Role of Industrialization on Economic Growth: The Experience of Senegal (1960-2017)

Ndiaya¹,

Lv²

2018

AJIBM

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The aim of this study is to contribute to the investigation of the impact of industrialization on economic growth by analyzing the Senegalese manufacturing firms. The paper utilized the secondary data drawn from the World Bank (WDI 2015) and the National Agency of Statistic and Demography in Senegal (ANSD) and covered the period between 1960 and 2017. It will employ the Ordinary Least Square (OLS) techniques in estimating the relationship between industrial output, inflation rate, FDI, Foreign Exchange Rate and economic growth, after which ADF unit root test was conducted using Breusch-Godfrey serial correlation LM test and Breusch-Pagan-Godfrey heteroskedasticity test. The econometric analysis has shown that the increase of industrial output will increase economic growth in Senegal. Therefore, there is significant relationship between industrial development and Senegalese economy growth. However, the result revealed that industrialization will go a long way in stimulating economic growth. Based on these results, we have recommended some policy measures in order to boost industrial output by improving the overall productivity of all the sectors and ensure sustainable development.

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“…The growth driver hypothesis assumes that the correlation between GDP per capita levels and manufacturing sector shares results from the characteristics of the manufacturing sector, which makes a particular contribution to economic growth. This assertion is known as Kaldor's first growth law (Kaldor, 1966;Pacheco-López and Thirlwall, 2013).…”

Section: Manufacturing Sector As An Engine Of Economic Growthmentioning

confidence: 99%

Industrialization and Economic Growth in Sub-Saharan Africa: The Role of Human Capital in Structural Transformation

Wonyra

2018

Journal of Empirical Studies

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The objective of this paper is to analyze the impact of the manufacturing sector on economic growth through the role of human capital. Our data cover Sub-Saharan African (SSA) countries from 1990 to 2015. We use fixed effects, random-effects and Hausman-Taylor estimators. We take into account the unobservable characteristics of countries by including fixed effects or random effects in the model. Our results show that the manufacturing sector through its value added has a positive impact on economic growth in SSA countries. In addition, the interacting models show that the quality of human capital is an accelerator of the role of the manufacturing sector. The coefficient of the catch-up term is negative and significant in all models indicating that countries with a larger productivity gap relative to China are developing faster than countries closer to China. This finding is consistent with the convergence effects usually found in growth model estimates, which are either related to convergences towards a stable state or to a catching-up of growth linked to the international diffusion of knowledge. Contribution/Originality: Unlike previous work, this article brings three major innovations. First, the inclusion of the key role of human capital, then the construction of the productivity indicator by considering China as a reference, and finally the consideration of the endowments of natural resources of countries in sub-Saharan Africa as country-specificity. Verspagen, 2015). In developed economies, the service sector accounts for nearly two-thirds of national production, giving the service industry a large weight in relation to manufacturing. Also, in developing economies, the service sector plays an important role. To this end, it is now argued that service sectors such as software, business processing, finance or tourism act as key sectors in development and that the role of the manufacturing sector is declining. The best example for this perspective is India since the 1990s (Dasgupta and Singh, 2005). Other authors argue that it is not manufacturing as a whole, but manufacturing sub-sectors such as information and

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A new interpretation of Kaldor's first growth law for open developing economies

Cited by 27 publications

References 15 publications

Services in Developing Economies: The Deindustrialization Debate in Perspective

Services in Developing Economies: The Deindustrialization Debate in Perspective

Role of Industrialization on Economic Growth: The Experience of Senegal (1960-2017)

Industrialization and Economic Growth in Sub-Saharan Africa: The Role of Human Capital in Structural Transformation

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