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Structural Transformation in South Asia

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  • Raghbendra Jha
  • Sadia Afrin

Abstract

This paper models the evolution and determinants of the shares of agriculture, manufacturing and services to GDP for 4 South Asian countries (Bangladesh, India, Sri Lanka and Pakistan) for 55 years: 1960-2014. Determinants of these shares were classified into three broad categories “country fundamentals”, “policy” and “decadal dummies. We find that with increase in GDP the share of services rises strongly whereas the share of manufacturing has a more tepid rise with GDP whereas the share of agriculture falls in most cases. Land per capita is positively associated with share of agriculture whereas arable land only weakly so. As capital and power rise the share of agriculture drops wherever it appears whereas FDI negatively influences the share of agriculture in one case. Share of manufacturing drops with rises in arable land, and rises with trade, capital and power. The share of services falls with land per capita and rises with power. Other influences are largely insignificant. The Kuznets model of structural transformation is supported to some extent.

Suggested Citation

  • Raghbendra Jha & Sadia Afrin, 2018. "Structural Transformation in South Asia," ASARC Working Papers 2018-01, The Australian National University, Australia South Asia Research Centre.
    • Handle: RePEc:pas:asarcc:2018-01
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    References listed on IDEAS

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    1. Raghbendra Jha & Sadia Afrin, 2016. "Pattern and determinants of structural transformation in Africa," Departmental Working Papers 2016-01, The Australian National University, Arndt-Corden Department of Economics.
    2. Raghbendra Jha, 2014. "Productive Employment and Empowering Education: An Agenda for India’s Youth," ASARC Working Papers 2014-01, The Australian National University, Australia South Asia Research Centre.
    3. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-452, May.
    4. J.A.F. Machado & P.M.D.C Parente & J.M.C. Santos Silva, 2011. "QREG2: Stata module to perform quantile regression with robust and clustered standard errors," Statistical Software Components S457369, Boston College Department of Economics, revised 02 Mar 2021.
    5. Kuznets, Simon, 1973. "Modern Economic Growth: Findings and Reflections," American Economic Review, American Economic Association, vol. 63(3), pages 247-258, June.
    6. Ms. Era Dabla-Norris & Mr. Alun H. Thomas & Mr. Rodrigo Garcia-Verdu & Ms. Yingyuan Chen, 2013. "Benchmarking Structural Transformation Across the World," IMF Working Papers 2013/176, International Monetary Fund.
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    More about this item

    Keywords

    South Asia; Structural Transformation; Pooled OLS; Quantile regression; Panel;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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