Trade in Services and Economic Growth

Park, Soonchan

doi:10.11644/kiep.jeai.2007.11.1.162

Cited by 1 publication

(6 citation statements)

References 5 publications

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“…In the short run and long run, the impact of services on GDP was positive and statistically significant at 5 percent with coefficients of 0.328 and 0.241, respectively, culminating from a one percent change on services towards the indicated percentage change in GDP as shown in Table 5 and Table 6 , respectively, with Table 7 and the Wald test also showing causality culminating from services to GDP over the short run. The findings of this study have been endorsed by findings of related studies [ 8 , 9 , 10 , 11 , 12 , 22 , 24 , 25 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 ], which also agree with the hypothesis that services have a significant impact on economic growth and contributing to the country’s sustained economic development. Other related studies agreed with the notion that causality was inferred culminating from services to GDP [ 62 , 63 , 64 , 65 ].…”

Section: Resultssupporting

confidence: 90%

“…The novelty of this paper is being the first to quantify the impact of services on Botswana’s GDP at a country level as well as showing the contribution of other sectors to GDP of Botswana. Similar studies conducted by various researchers in different parts of the world argued and concluded that there exists an impact culminating from services to GDP growth [ 8 , 9 , 10 , 11 , 12 , 22 , 24 , 25 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 ]. Other studies further acknowledged that specialized services in energy [ 39 ], finance development [ 4 , 7 , 9 , 10 , 33 ], healthcare [ 29 , 33 , 35 ], technology [ 8 ], and investment and service exports [ 24 , 25 , 40 ].…”

Section: Introductionmentioning

confidence: 65%

“…Similar studies conducted by various researchers in different parts of the world argued and concluded that there exists an impact culminating from services to GDP growth [ 8 , 9 , 10 , 11 , 12 , 22 , 24 , 25 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 ]. Other studies further acknowledged that specialized services in energy [ 39 ], finance development [ 4 , 7 , 9 , 10 , 33 ], healthcare [ 29 , 33 , 35 ], technology [ 8 ], and investment and service exports [ 24 , 25 , 40 ]. These conclusions are affirmed by previous studies supported by the modernization and structural transformation theories are the basis of a hypothesis that this paper seeks to test.…”

Section: Introductionmentioning

confidence: 65%

“…Similarly, in one of the structural transformation theories, Ranis and Lewis agreed that as a country undergoes development, factors of production are reallocated from an agricultural sector to an industrial sector [ 16 , 23 ]. Eventually transformed from a heavy emphasis on the traditional agriculture economy to a more service and industrial one [ 8 , 9 , 10 , 24 , 25 ]. The contribution to GDP by the industry sector eventually surpasses that of the agricultural sector [ 19 ].…”

Section: Introductionmentioning

confidence: 99%

“…The contribution to GDP by the industry sector eventually surpasses that of the agricultural sector [ 19 ]. Additionally, the service sector has contributed towards income generation (for example through tourism) which is essential for economic development [ 8 , 9 , 10 , 24 , 25 , 26 , 27 ]. Furthermore, over the years, it has proven to be a key contributor to employment in developing countries, particularly for middle- and lower-income countries.…”

Section: Introductionmentioning

confidence: 99%

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Services as a Determinant of Botswana’s Economic Sustainability

Phiri

Malec

Sakala

et al. 2022

IJERPH

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In 2015, the services sector contributed about 58 percent to the gross domestic product (GDP) in Sub-Saharan Africa (SSA), which was a significant increase from the 47.6 percent observed in 2005, and a shift from the mining, agriculture, and manufacturing sector. This increase calls to support services as the catalyst for sustained economic development as indicated by the structural transformation and modernization theories. The main objective of this paper was to examine the relationship between and the impact of services on the economic development in Botswana and make recommendations on how Botswana can apply well-directed policies to improve its services sector and diversify its impact on other sectors and GDP, making it less reliant on mining which is vulnerable to price volatilities. The paper applied econometric modeling and results of the Autoregressive-Distributed Lag (ARDL) Bounds test for cointegration indicate that services and other industries services, agriculture, industry, mining, and investment impact GDP over the short and long run. These variables impacted GDP and converged to equilibrium at the speed of 46.89 percent, with a percent change in services in the short and long run impacting GDP by 0.328 and 0.241 percentages, respectively, and the outcome of the Wald test indicated causality from services to GDP growth. The services sectors have contributed over 40 percent to the country’s GDP from 1995 to the present, though the sectors have not gone without challenges with limitations such as limited infrastructure development; poverty and inequality; unemployment of over 20 percent; disease, which has dampened productivity; and lack of proper governance and accountability, which has created a habitat for an increase in cases of corruption in state and private entities. The findings of the study with the lessons learned from other studies with similar findings recommend that the government of Botswana should formulate suitable policies and strategies for services diversification. This is by expanding the market for the sector in areas such as tourism that were impacted by the COVID-19 pandemic, escalating investments by instituting strategies to attract and grow domestic and foreign investments, and improve on management of institutions and resources.

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