Journal Press India®

Does Structural Change Occur in Manufacturing Sectors? Cross-country Evidence with Special Reference to India

Vol 8 , Issue 2 , July - December 2021 | Pages: 01-29 | Research Paper  

 
Article has been added to the cart.View Cart (0)
https://doi.org/10.17492/jpi.focus.v8i2.822101


Author Details ( * ) denotes Corresponding author

1. * Sarbapriya Ray, Associate Professor, Department of Commerce, Vivekananda College, Howrah, West Bengal, India (sarbapriyaray@gmail.com)
2. Abhijeet Bag, Research Scholar & Assistant Professor, Department of Commerce, Coochbehar Panchanan Barma University, Coochbehar, West Bengal, India (abhijeet.bag@gmail.com)

The article aims to investigate the nature of structural changes of manufacturing sectors of selected countries including India. It tries to find out whether there is continuing shift of the sources of economic growth from the manufacturing sector to the services sector. The result suggests that the moving force of economic growth has reallocated unquestionably from the manufacturing sector to service sector in all countries but at different pace. Specifically, we interpret that Indian manufacturing pulls along services. A turn-down or boost- up in the growth rate of manufacturing sector will pessimistically or optimistically have an effect on the growth rate of the services sector in the long-run. From our interpretation of all countries surveyed, it has been observed that the manufacturing sector remains essential for both developing as well as developed economies along with services sector. Nevertheless, manufacturing plays a crucial role in developing economies whereas services is much more vital in developed economies.

Keywords

Manufacturing sector; Services sector; Industry structure; India.

  1. Amirapu, A., & Subramanian, A. (2015). Manufacturing or services? An Indian illustration of a development dilemma. Centre for Global Development, Working Paper, 409, June, 2015.
  2. Anderson, J. (2007). Dragon Economy [in Chinese]. Taipei: Royal Publishing Co.
  3. Barro. R. J. (2001). Human capital and growth. American Economic Review, 91(2), 12–17.
  4. Baumol, W. (1986). Productivity growth, convergence and welfare: What the long-run data show. American Economic Review, 76, 1072-1085.
  5. Bhat, T. P. (2014). Structural changes in the manufacturing sector and growth prospect. Working Paper-173, Institute for Studies in Industrial Development, New Delhi.
  6. Buera, Francisco J., & Kaboski, Joseph P. (2012). Scale and the origins of structural change. Journal of Economic Theory, 147(2), 684-712. https://doi.org/10.1016/j.jet. 2010.11.007.
  7. Chakravarty, S., & Mitra, A. (2009). Is industry still the engine of growth? An econometric study of the organized sector employment in India. Journal of Policy Modeling, 31(1), 22-35.
  8. Chu, Y-P., C-C. Wang., W-J. Lian., D. Ma., C-S. Lin., & H-H. Chen. (2007). The rise of India [in Chinese]. Taipei: Global Group Holdings.
  9. Cornwall, J. (1977). Modern capitalism: It’s growth and transformation. New York: St. Martin’s Press.
  10. Johansen, S., & Juselius, K. (1992). Testing Structural Hypotheses in Multivariate Co integration Analysis of the PPP and UIP for UK, Journal of Econometrica, 53, 211-244.
  11. Kalirajan, K. (2004). Is the manufacturing sector in India an engine of growth? Working Paper 151, Institute for Social and Economic Change, Bangalore, India.
  12. Kamdar, M. (2007). Planet India: How the Fastest-growing democracy is transforming America and the world. New York: Scribner.
  13. Lee, T. B. (2016). The productivity paradox: Why we're getting more innovation but less growth. Vox, October, 2016. Retrieved from https://www.vox.com/new-money/2016/10/24/13327014/productivity-paradox-innovation-growth
  14. Mallick, Jagannath. (2017). Structural change and productivity growth in India and People’s Republic of China. ADBI Working Paper Series, No. 656, February, Asian Development Bank Institute.
  15. Meredith, R. (2007). The Elephant and the Dragon: The rise of India and China and what it means for all of us. New York: W. W. Norton & Company.
  16. OECD. (2009). Global Value Chains (GVCs): India. Retrieved from https://search.oecd.org/sti/ind/GVCs%20-%20INDIA.pdf
  17. Santacreu, A. M., & Zhu, H. (2018). Manufacturing and service sector roles in the evolution of innovation and productivity. Economic Research, Federal Reserve Bank of St. Louis.
  18. Su, D. & Yao, Y. (2017). Manufacturing as key engine of economic growth in middle income economies. Journal of Asia Pacific Economy, 22(1), 47-70.
  19. Szirmai Adam (2009) Is manufacturing still the main Engine of growth in developing countries? WIDER Angle newsletter, May 2009.
  20. Szirmai, A. (2009). Industrialization as an engine of growth in developing countries, 1950-2005. UNU-MERIT, Working paper, 10.
Abstract Views: 36
PDF Views: 12

By continuing to use this website, you consent to the use of cookies in accordance with our Cookie Policy.