Role of Structural Change in Economic Growth: An Empirical Evidence from a Panel of Asian Countries

Riaz, Umar; Hussain, Babar; Bhatti, Arshad Ali

doi:10.47264/idea.lassij/4.2.27

Cited by 3 publications

(2 citation statements)

References 42 publications

(78 reference statements)

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“…As described above, structural transformation forms an integral part of modern economic growth theory, making structural change theory relevant to this study. Structural change, as defined by Van Neuss (2019) in Riaz et al (2020), is the "reallocation of economic activity across the three broad sectors agriculture, manufacturing and services." One major aspect of structural change theory, which involves the shift of labor from agriculture to industries, is not limited to agro-processing and/or agro-based manufacturing (Kuznets, 1973;Lewis, 1954).…”

Section: Theories Of Economic Growthmentioning

confidence: 99%

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Systematic Review of the Factors Impacting the Agro-processing Sector Towards Economic Growth & Development: A Case for Ghana

2022

JESD

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In Ghana, the processing of agricultural raw materials into intermediate and secondary, agro-processing, is largely small-scale and informal. Formalizing and expanding the agro-processing sector to increase the share of manufacturing value-add (MVA) on the Gross Domestic Product (GDP) of Ghana is an ongoing struggle. It is also unclear what the impeding growth factors are and what the leaders of Ghana are doing to rapidly fix this fundamental economic problem. This study aimed at bridging the gap between evidence-based research (EBR) and practice to fundamentally understand the growth factors that impact the agro-processing sector of Ghana towards economic growth and development. EBR is a scientific process of gathering the best available evidence to inform evidence-based practice (EBP). EBP requires the use of scientific, accountable, and explicit methods to gather credible and quality evidence for management decision-making. The systematic review methodology, which fits the rationale for EBR, was used to aggregate credible, quality, and best available evidence to help leaders in Ghana and management practitioners to make decisions on why the agro-processing sector of Ghana is still weak and undeveloped today, despite being known as a haven for agricultural raw materials. Thematic synthesis was used to aggregate evidence from 31 included articles, resulting in 7 analytical themes that directly addressed the overarching research question, "What growth factors impact the agro-processing sector of Ghana for economic growth and structural transformation". Theme 1 categorized the growth factors impacting the agro-processing sector into 17 endogenous (e.g., knowledge management, technology, and innovation capability, access to capital, etc.) and 3 exogenous concerns (e.g., the influence of external organizations (e.g., International Monetary Fund (IMF), Foreign Direct Investments (FDI), etc.). Themes 2-7 addressed aspects of economic growth and structural transformation. Though this study was limited by time and the databases used to search for relevant scholarships, it rigorously informed management decision-making on how the agro-processing sector could be used to drive economic and structural transformation in Ghana and other resource-rich developing countries across the globe.

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Section: Theories Of Economic Growthmentioning

confidence: 99%

“…Figure 1: Conceptual model of how agro-processing can drive manufacturing value-add, engendering endogenous economic growth and structural transformation through (Gabardo et al, 2017;Kuznets, 1973;Lewis, 1954;Riaz et al, 2020;Rostow, 1959;van Neuss, 2019) 1.1.1 Heading 3…”

Section: Theories Of Economic Growthmentioning

confidence: 99%

Systematic Review of the Factors Impacting the Agro-processing Sector Towards Economic Growth & Development: A Case for Ghana

2022

JESD

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Structural change and economic growth: Causality relationships in the case of Poland

Cyrek

2024

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Research background: Structural change and economic growth characterise any process of economic development and have relevant research background. However, the research on identification of a character of relationships between the phenomena are not conclusive. Researchers either find that economic growth induces structural change and the process is demand-driven or that structural change determines economic growth and the dependencies are supply-driven or that the relation is two-directional with overlapping interdependencies. Moreover, the association may be shaped differently depending on specific development conditions of each economy and transform over time. Purpose of the article: The aim of the study is to investigate the relationships between economic growth and structural change in the sectional composition of employment in Poland using state-level quarterly data for 2008–2022. It empirically verifies whether economic growth determines structural change or changes in economic structure influence growth in this specific national context, giving insights into a character of the developmental interdependencies. However, the Polish case is only an example of developmental feedbacks that may specify any catching-up economy. Diagnosing the dominating character of the economic relation is of high importance for any modern transforming country and identifying any limitations to the interdependencies may make it possible to avoid the middle-income trap. Methods: The paper examines the causality using Granger-test and analyses the relationships with VAR models. It uses some alternative measures of structural change, namely Norm of Absolute Value (NAV), Modified Lilien Index (MLI), and Clark Index (CI) to catch labour reallocation across sections of economic activity (NACE Rev. 2). They are then adopted in lead-lag models of relationships with economic growth. Findings & value added: The study browses the classical three-sectoral approach to structural transformation using a more detailed structural layout to capture its modern character. Moreover, it compares alternative measures of structural change to derive more detailed conclusions. Methodologically, the study highlights the need for in-depth research into structural change with finer aggregation and measures with different properties. The paper is focused on a specific situation in the Polish economy, for which the relationships have not yet been verified. However, the findings are more universal and may be interesting for any catching-up economy that plans its development policy and needs to focus either on demand- or supply side-relationships. The results suggest rather unidirectional causality running from economic growth to structural change and thus a demand-driven character of the structural modernisation of the Polish economy. This implies the necessity to build stronger inter-sectoral linkages that enable spillover effects that can accelerate growth and induce mutually reinforcing mechanisms of development.

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Impact of the foreign remittances on economic growth and poverty reduction: an analysis of Pakistan’s economy

Rehman¹,

Shah²,

Rehman³

2023

J. Humanit. Soc. Manag. Sci.

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Remittance is one of the significant factors of foreign capital inflow, which has an essential role in GDP growth and poverty reduction by increasing income, investment, decreasing credit limitations, and promoting HDI. Since 1970, remittances have played a significant role in Pakistan's economy. The study aims to investigate the impact of foreign remittances on economic growth and poverty reduction in Pakistan and uses data from 1981-2020. Based on the form of data, this study used auto-regressive distributed lag systems for assessment. This research discovered that exports, FDI, capital formation, labour force and secondary school enrolment positively affect GDP growth in the long term. In contrast, remittances have helpful effects on GDP growth. Similarly, the GDP per capita, exports, labour force and remittances positively affect poverty reduction in the long term. The FDI, capital formation and secondary school enrolment positively affect poverty reduction. As a result, this study concluded that remittances significantly influence GDP growth and poverty reduction in Pakistan. The study strongly recommended facilitating the families and workers working aboard to increase foreign remittances to enhance GDP growth and poverty reduction.

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Role of Structural Change in Economic Growth: An Empirical Evidence from a Panel of Asian Countries

Cited by 3 publications

References 42 publications

Systematic Review of the Factors Impacting the Agro-processing Sector Towards Economic Growth & Development: A Case for Ghana

Systematic Review of the Factors Impacting the Agro-processing Sector Towards Economic Growth & Development: A Case for Ghana

Structural change and economic growth: Causality relationships in the case of Poland

Impact of the foreign remittances on economic growth and poverty reduction: an analysis of Pakistan’s economy

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