Economic development and complexity: Introduction to special issue

Basilio, João

doi:10.1016/j.econ.2020.05.001

Cited by 4 publications

(2 citation statements)

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“…Economic development is a process of capital accumulation with the incorporation of technical progress that increases productivity and wages and living standards in the long term; increased productivity involves industrialization or, more precisely, productive sophistication, because it happens less due to the production of the same goods and services, and more due to the transfer of labor from low sectors to sectors of high added value per capita. (Bresser-Pereira, 2016, p. 246) Thus, this study brings together two strands of the literature; the determinants of EC, which are underexplored (Hidalgo, 2021;Pereima, 2020), and the potential developmental effects of employment shares. By so doing, it contributes to the existing literature in several ways.…”

Section: Introductionmentioning

confidence: 99%

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Sectoral Employment Shares Shape Economic Complexity: Empirical Evidence from African Countries

Ketu

Ningaye

2023

Global Journal of Emerging Market Economies

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Since the physiocrats, agriculture has been seen as a panacea for economic development. However, studies suggest that manufacturing and, recently, advanced service industries are the engine of economic growth. This study analyzes how employment structure contributes to economic complexity (EC) in African countries. To achieve this objective, it uses data spanning 1996–2017 on 27 African countries and applies the ordinary least squares, fixed effects, and system generalized method of moments estimators. Results suggest that due to its inability to admit many divisions or develop production linkages, agriculture’s employment growth is negatively associated with EC. Thus, there are better fits for enhancing complex output in Africa than a more significant share of agricultural employment. On the contrary, employment growth in industry and services enhances the production of sophisticated goods. These findings are robust after several sensitivity checks. Among policy implications from these findings, agriculture should shift from subsistence to mechanized farming, allowing excess workers to reallocate to more productive sectors of industry and advanced services.

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Section: Introductionmentioning

confidence: 99%

“…Thus, this study brings together two strands of the literature; the determinants of EC, which are underexplored (Hidalgo, 2021; Pereima, 2020), and the potential developmental effects of employment shares. By so doing, it contributes to the existing literature in several ways.…”

Section: Introductionmentioning

confidence: 99%