[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/iie/wpaper/wp12-18.html
   My bibliography  Save this paper

Developing the Services Sector as Engine of Growth for Asia: An Overview

Author

Listed:
  • Marcus Noland

    (Peterson Institute for International Economics)

  • Donghyun Park

    (Asian Development Bank)

  • Gemma B. Estrada

    (Asian Development Bank)

Abstract
The maturing of the manufacturing sector in many Asian countries, combined with the relative backwardness of its services sector, has made services sector development a top priority for developing Asia. Our central objective is to broadly survey and analyze the current landscape of the region's services sector so as to assess its potential to serve as an engine for inclusive economic growth. Our analysis indicates that services are already an important source of output, growth, and jobs in the region. However, its productivity greatly lags that of the advanced economies, which implies ample room for further growth. The impact of services sector on poverty reduction is less clear but we do find some limited evidence of a poverty reduction effect. One key challenge for all Asian countries is to improve the quality of services sector data. Overall, while services sector development is a long and challenging process, creating more competitive services markets by removing a wide range of internal and external policy distortions is vital for improving services sector productivity. As important as such policy reforms are, complementary investments in physical infrastructure and human capital will also be necessary to achieve a strong services sector.

Suggested Citation

  • Marcus Noland & Donghyun Park & Gemma B. Estrada, 2012. "Developing the Services Sector as Engine of Growth for Asia: An Overview," Working Paper Series WP12-18, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp12-18
    as

    Download full text from publisher

    File URL: https://www.piie.com/publications/working-papers/services-sector-asia-it-engine-growth
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dirk Pilat & Anita Wölfl, 2005. "Measuring the Interaction Between Manufacturing and Services," OECD Science, Technology and Industry Working Papers 2005/5, OECD Publishing.
    2. Ghani, Ejaz & Kharas, Homi, 2010. "The Service Revolution," World Bank - Economic Premise, The World Bank, issue 14, pages 1-5, May.
    3. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    4. Barry Eichengreen & Poonam Gupta, 2013. "The two waves of service-sector growth," Oxford Economic Papers, Oxford University Press, vol. 65(1), pages 96-123, January.
    5. Leamer, Edward E, 1987. "Paths of Development in the Three-Factor, n-Good General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 961-999, October.
    6. Marcus Noland & Howard Pack, 2003. "Industrial Policy in an Era of Globalization: Lessons from Asia," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 358, April.
    7. Ghani, Ejaz (ed.), 2010. "The Service Revolution in South Asia," OUP Catalogue, Oxford University Press, number 9780198065111.
    8. Gootiiz, Batshur & Mattoo, Aaditya, 2009. "Services in Doha : what's on the table ?," Policy Research Working Paper Series 4903, The World Bank.
    9. Park, Donghyun & Shin, Kwanho, 2012. "The Service Sector in Asia: Is It an Engine of Growth?," ADB Economics Working Paper Series 322, Asian Development Bank.
    10. Perotti, Roberto, 1996. "Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-187, June.
    11. Jed Kolko, 2010. "Urbanization, Agglomeration, and Coagglomeration of Service Industries," NBER Chapters, in: Agglomeration Economics, pages 151-180, National Bureau of Economic Research, Inc.
    12. World Bank, 2012. "World Development Report 2012 [Rapport sur le développement dans le monde 2012]," World Bank Publications - Books, The World Bank Group, number 4391.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gitana Dudzevičiūtė & Gitana Dudzevičiūtė, 2013. "Lithuanian manufacturing trends in the context of developed and developing countries," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 1(1), pages 55-66, September.
    2. Guna Raj Bhatta, 2014. "Structural Changes in a Small and Open Economy: Evidences from Nepal," NRB Working Paper 23/2014, Nepal Rastra Bank, Research Department.
    3. Yothin Jinjarak & Paulo Jose Mutuc & Ganeshan Wignaraja, 2014. "Does Finance Really Matter for the Participation of SMEs in International Trade? Evidence from 8,080 East Asian Firms," Trade Working Papers 24047, East Asian Bureau of Economic Research.
    4. Guna Raj Bhatta, 2014. "Structural Change and Per Capita Income in Nepal: Empirical Evidences," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 26(2), pages 41-60, October.
    5. Vannarith CHHEANG, 2017. "FDI, Services Liberalisation, and Logistics Development in Cambodia," Working Papers DP-2016-39, Economic Research Institute for ASEAN and East Asia (ERIA).
    6. Samuel Admassu, 2020. "An empirical analysis of the causal nexus between service trade and income," Empirical Economics, Springer, vol. 59(2), pages 799-816, August.
    7. Claes G. Alvstam & Erja Kettunen & Patrik Ström, 2017. "The service sector in the free-trade agreement between the EU and Singapore: closing the gap between policy and business realities," Asia Europe Journal, Springer, vol. 15(1), pages 75-105, March.
    8. Haroon Bhorat & François Steenkamp & Christopher Rooney & Nomsa Kachingwe & Adrienne Lees, 2016. "Understanding and characterizing the services sector in South Africa," WIDER Working Paper Series 157, World Institute for Development Economic Research (UNU-WIDER).
    9. Ganeshan Wignaraja, 2014. "Will South Asia Benefit from Pan-Asian Integration?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 15(2), pages 175-197, September.
    10. Gitana Dudzevičiūtė, 2013. "Lithuanian manufacturing trends in the context of developed and developing countries," Post-Print hal-01694317, HAL.
    11. Justin Visagie & Ivan Turok, 2019. "The contribution of services to trade and development in Southern Africa," WIDER Working Paper Series wp-2019-37, World Institute for Development Economic Research (UNU-WIDER).
    12. Anbumozhi, Venkatachalam & Kalirajan, Kaliappa, 2020. "South Asia’s Economic Integration with East Asia: An Exploratory Analysis with a Focus on India," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 35(1), pages 91-110.
    13. Peter W. Daniels & Pengfei Ni, 2014. "Urbanisation and changes in the sectoral structure of economic development: the scale of the manufacturing sector in Chinese cities and the shift towards service industry," Working Papers hal-00943972, HAL.
    14. Khatiwada, Sameer & Flaminiano, John Paul, 2019. "Prospects for Decent Work in Services," ADBI Working Papers 940, Asian Development Bank Institute.
    15. Ayhan Orhan & Dervis Kirikkaleli & Fatih Ayhan, 2019. "Analysis of Wavelet Coherence: Service Sector Index and Economic Growth in an Emerging Market," Sustainability, MDPI, vol. 11(23), pages 1-12, November.
    16. Wignaraja, Ganeshan, 2014. "Assessing the Experience of South Asia–East Asia Integration and India’s Role," ADBI Working Papers 465, Asian Development Bank Institute.
    17. Haroon Bhorat & François Steenkamp & Christopher Rooney & Nomsa Kachingwe & Adrienne Lees, 2016. "Understanding and characterizing the services sector in South Africa: An overview," WIDER Working Paper Series wp-2016-157, World Institute for Development Economic Research (UNU-WIDER).
    18. Maisya Farhati & Raquel Ortega-Argilés, 2018. "Growth of service sector in BRIIC economies," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 10(1), pages 40-52, April.
    19. Valerie Mercer-Blackman & Christine Ablaza, 2018. "The Servicification of Manufacturing in Asia: Redefining the Sources of Labor Productivity," Working Papers id:12954, eSocialSciences.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mishra, Saurabh & Lundstrom, Susanna & Anand, Rahul, 2011. "Service export sophistication and economic growth," Policy Research Working Paper Series 5606, The World Bank.
    2. Jungsuk Kim & Jacob Wood, 2020. "Service sector development in Asia: an important instrument of growth," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 34(1), pages 12-25, May.
    3. Shahbaz Nasir & Kaliappa Kalirajan, 2016. "Information and Communication Technology-Enabled Modern Services Export Performances of Asian Economies," Asian Development Review, MIT Press, vol. 33(1), pages 1-27, March.
    4. Mr. Nikola Spatafora & Rahul Anand & Mr. Saurabh Mishra, 2012. "Structural Transformation and the sophistication of Production," IMF Working Papers 2012/059, International Monetary Fund.
    5. Baldwin, Richard & Forslid, Rikard, 2023. "Globotics and Development: When Manufacturing Is Jobless and Services Are Tradeable," World Trade Review, Cambridge University Press, vol. 22(3-4), pages 302-311, October.
    6. M.A. Véganzonès-Varoudakis & H. T. M. Nguyen, 2018. "Investment climate, outward orientation and manufacturing firm productivity: new empirical evidence," Applied Economics, Taylor & Francis Journals, vol. 50(53), pages 5766-5794, November.
    7. Pravakar Sahoo & Ranjan Kumar Dash, 2017. "What Drives India's Surge in Service Exports?," The World Economy, Wiley Blackwell, vol. 40(2), pages 439-461, February.
    8. Fakhri J. Hasanov & Jeyhun I. Mikayilov & Sabuhi Yusifov & Khatai Aliyev & Samra Talishinskaya, 2019. "The role of social and physical infrastructure spending in tradable and non-tradable growth," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 13(1), March.
    9. Gisela Di Meglio & Jorge Gallego & Andrés Maroto & Maria Savona, 2015. "Services in Developing Economies: A new chance for catching-up?," SPRU Working Paper Series 2015-32, SPRU - Science Policy Research Unit, University of Sussex Business School.
    10. Fernando Alexandre & Pedro Bação, 2012. "Portugal before and after the European Union: Facts on Nontradables," NIPE Working Papers 15/2012, NIPE - Universidade do Minho.
    11. Ranjan Dash & P. Parida, 2013. "FDI, services trade and economic growth in India: empirical evidence on causal links," Empirical Economics, Springer, vol. 45(1), pages 217-238, August.
    12. Di Meglio, Gisela & Gallego, Jorge, 2022. "Disentangling services in developing regions: A test of Kaldor's first and second laws," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 221-229.
    13. Ghani, Ejaz & Kerr, William & O'Connell, Stephen, 2013. "Promoting Women’s Economic Participation in India," World Bank - Economic Premise, The World Bank, issue 107, pages 1-6, February.
    14. 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.
    15. Gary Clyde Hufbauer & J. Bradford Jensen & Sherry Stephenson & Julia Muir & Martin Vieiro, 2012. "Framework for the International Services Agreement," Policy Briefs PB12-10, Peterson Institute for International Economics.
    16. Sèna Kimm Gnangnon, 2021. "Services diversification and economic growth," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 18(1), pages 49-86, June.
    17. Jieun Choi, 2016. "Competitiveness of the Kyrgyz Economy in the Wake of Accession to the Eurasian Customs Union," World Bank Publications - Reports 24252, The World Bank Group.
    18. Gnangnon, Sèna Kimm, 2020. "Aid for Trade and Services Export Diversification in Recipient-Countries," EconStor Preprints 210467, ZBW - Leibniz Information Centre for Economics.
    19. Gable, Susanna Lundstrom & Mishra, Saurabh, 2011. "Service Export sophistication and Europe's new growth model," Policy Research Working Paper Series 5793, The World Bank.
    20. P. K. Mishra & S. K. Mishra & M. K. Sarangi, 2020. "Do Women’s Advancement and Gender Parity Promote Economic Growth? Evidence from 30 Asian Countries," Millennial Asia, , vol. 11(1), pages 5-26, April.

    More about this item

    Keywords

    Services; structural change; growth; productivity; Asia;
    All these keywords.

    JEL classification:

    • L8 - Industrial Organization - - Industry Studies: Services
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iie:wpaper:wp12-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peterson Institute webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/iieeeus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.