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Factor Reallocation and Growth in Developing Countries

Author

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  • Ms. Hélène Poirson

Abstract

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).

Suggested Citation

  • Ms. Hélène Poirson, 2000. "Factor Reallocation and Growth in Developing Countries," IMF Working Papers 2000/094, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2000/094
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    Citations

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    Cited by:

    1. Raiser, Martin & Schaffer, Mark & Schuchhardt, Johannes, 2004. "Benchmarking structural change in transition," Structural Change and Economic Dynamics, Elsevier, vol. 15(1), pages 47-81, March.
    2. Jonathan Temple & Ludger Wößmann, 2006. "Dualism and cross-country growth regressions," Journal of Economic Growth, Springer, vol. 11(3), pages 187-228, September.
    3. Mr. Boileau Loko & Mame Astou Diouf, 2009. "Revisiting the Determinants of Productivity Growth - What’s new?," IMF Working Papers 2009/225, International Monetary Fund.
    4. Quinn, Michael A. & Rubb, Stephen, 2006. "Mexico's labor market: The importance of education-occupation matching on wages and productivity in developing countries," Economics of Education Review, Elsevier, vol. 25(2), pages 147-156, April.
    5. Ching-Cheng Chang & Michael Mendy, 2012. "Economic growth and openness in Africa: What is the empirical relationship?," Applied Economics Letters, Taylor & Francis Journals, vol. 19(18), pages 1903-1907, December.
    6. Junior Davis & Dirk Bezemer, 2005. "Key emerging and conceptual issues in the development of the rural non-farm economy in developing countries and transition economies," Development and Comp Systems 0510017, University Library of Munich, Germany.
    7. Escaith, Hubert, 2007. "Old and new dualisms in Latin America and Asia: labour productivity, international competitiveness and income distribution," MPRA Paper 14510, University Library of Munich, Germany, revised 2008.
    8. Shahid Yusuf, 2003. "Globalisation and the Challenge for Developing Countries," Journal of African Economies, Centre for the Study of African Economies, vol. 12(Supplemen), pages 35-72, February.

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