Benchmarking Structural Transformation Across the World
IMF Working Papers, July 31, 2013
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Bibliographic details
- Authors: Era Dabla-Norris, Alun H. Thomas, Rodrigo Garcia-Verdu, Yingyuan Chen
- Published: July 31, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484359662.001
Overview
- Documents stylized facts on the process of structural transformation around the world.
- Empirically analyzes determinants using data on real value added by sector of economic activity (agriculture, manufacturing and services).
- Panel covers 168 countries over the period 1970-2010.
- Uses both linear and quantile regression methods.
Key findings
- There are large differences in sector shares both across and within regions and for countries at similar levels of economic development.
- A large proportion of the cross-country variation in sector shares can be accounted for by country characteristics, notably:
- real GDP per capita
- demographic structure
- population size
- Policy and institutional variables improve the baseline model’s ability to account for variation in sectoral shares across countries. These variables include:
- product market reforms
- openness to trade
- human capital
- physical capital
- finance
Methodology and data
- Data: real value added by sector (agriculture, manufacturing, services).
- Sample: panel of 168 countries.
- Time period: 1970-2010.
- Econometric approaches: linear regression and quantile regression methods.
Implications for analysis and policy
- Cross-country heterogeneity in structural transformation is substantial even among countries at similar income levels, implying one-size-fits-all models are insufficient.
- Incorporating policy and institutional variables (product market reforms, trade openness, human and physical capital, finance) enhances explanatory power for sectoral composition.
- Demographic structure and population size are important non-policy determinants that should be included when benchmarking structural transformation.
Keywords and subjects emphasized
- Subjects: Agricultural sector, Economic growth, Economic sectors, Manufacturing, National accounts, Personal income, Services sector, Structural transformation.
- Keywords: Agricultural sector, Agriculture, agriculture shares distribution, Central and Eastern Europe, labor market, Manufacturing, manufacturing share, output share, Panel Data, Personal income, quantile estimate, quantile regression, sectoral share, Services, Services sector, services sectors share, Structural Transformation, Sub-Saharan Africa, WP.
Source: Benchmarking Structural Transformation Across the World, Era Dabla‑Norris, Alun H. Thomas, Rodrigo Garcia‑Verdu, Yingyuan Chen; IMF Working Paper No. 2013/176.