Factor Reallocation and Growth in Developing Countries
June 1, 2000
Download PDF
More Formats on IMF eLibrary
Order a Print CopyDisclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary
This paper examines the extent to which developing countries benefit from intersectoral factor transfers by specifying the impact and determinants of sectoral changes and of the degree of dualism (or allocation inefficiency) in a dual economy model. Conditions under which factor reallocation is growth-enhancing are derived. An empirical error-correction equation is estimated for 30 developing countries during 1965-80. Results suggest that labor reallocation effects are especially important in countries with high rates of investment (and thus high rates of labor transfer) and/or at low levels of development (and thus high degrees of dualism).
Subject: Capital productivity, Expenditure, Human capital, Labor, Labor productivity, Production, Public expenditure review
Keywords: Capital productivity, dualism, East Asia, factor productivity, Factor reallocation, GDP growth, growth, Human capital, labor coefficient, labor productivity, Labor productivity, labor reallocation, Public expenditure review, reallocation effect, South Asia, Sub-Saharan Africa, WP
Pages:
29
Volume:
2000
DOI:
Issue:
094
Series:
Working Paper No. 2000/094
Stock No:
WPIEA0942000
ISBN:
9781451851717
ISSN:
1018-5941
