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Inside the black box of services: evidence from India

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  • Gaurav Nayyar

Abstract

In general, economists have treated the services sector as a black box. India, where the sector now dominates economic activity, is no exception. The object of this paper is to develop a taxonomy of the services sector with reference to different economic characteristics. Analysing data from India, we find that it is a set of highly heterogeneous economic activities with respect to productivity-enhancing technology characteristics, barriers to entry for employment, factor use, linkages with other sectors and tradability in international markets. This is indicative of subsector-specific implications for economic growth, balance of payments, employment, the sustainability of services-led growth, poverty, inequality and the different explanations for the growing share of the services sector in total output. Importantly, these implications, which lend perspective to the findings of a growing literature on the subject, provide a stepping stone for advancing significant research questions, both in the context of India and elsewhere. Copyright , Oxford University Press.

Suggested Citation

  • Gaurav Nayyar, 2013. "Inside the black box of services: evidence from India," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(1), pages 143-170.
  • Handle: RePEc:oup:cambje:v:37:y:2013:i:1:p:143-170
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    File URL: http://hdl.handle.net/10.1093/cje/bes039
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    Cited by:

    1. Gogol Mitra Thakur, 2023. "Modern services led growth and development in a structuralist dual economy: Long‐run implications of skilled labor constraint," Metroeconomica, Wiley Blackwell, vol. 74(4), pages 748-776, November.
    2. Banerjee, Rajabrata & Roy, Saikat Sinha, 2014. "Human capital, technological progress and trade: What explains India's long run growth?," Journal of Asian Economics, Elsevier, vol. 30(C), pages 15-31.
    3. Balakrishnan, Pulapre & Das, Mausumi & Parameswaran, M., 2017. "The internal dynamic of Indian economic growth," Journal of Asian Economics, Elsevier, vol. 50(C), pages 46-61.
    4. Anirban Kundu, 2020. "Impact of trade liberalisation on formal–informal interlinkages in India: does sectoral labour mobility matter?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-29, December.
    5. Michael D. Clemes & Baiding Hu & Xuedong Li, 2016. "Services and economic growth in China: an empirical analysis," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(4), pages 612-627, October.
    6. Vusal Murselzade & Behiye Cavusoglu, 2021. "Relationship between the Service Sector and Economic Growth: Evidence from China," Asian Journal of Social Sciences and Management Studies, Asian Online Journal Publishing Group, vol. 8(1), pages 15-22.

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