Main Article Content
This paper analyses the relationship between productive specialisation and economic growth in the 15 older European Union member states between 1970 and 2005. The sectoral taxonomy proposed by (Peneder, 2007) is used to classify the different sectors of activity according to the educational levels of the respective workforce and establish a comparison between the manufacturing and the services sector, based on their potential contribution to productivity improvements. The empirical model corresponds to a growth regression where the employment share of the different sectors is the main explanatory variable taken alongside other control variables identified in the empirical growth literature as robust growth determinants and is estimated with the fixed effects method. The results indicate that a higher weight of manufacturing activities that use mostly very low and low educated workers presents a negative association with growth. Services activities that require low educated workers make a negative growth contribution. Manufacturing activities with high and medium-high educational requirements have a positive growth influence, while in the case of services only activities that require highly-educated workers show a positive correlation with growth. The policy advice that can be extrapolated from this study contemplates the design of industrial policies that promote manufacturing activities such as chemicals, telecommunications and transports equipment, and services such as financial intermediation, audit, tax consulting, engineering and legal activities, to promote growth.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Once the manuscript is accepted for publication, authors shall transfer the copyright to the publisher. If the submitted manuscript is not accepted for printing by the journal, the authors shall retain all their rights. The following rights on the manuscript are transferred to the publisher, including any supplementary materials and any parts, extracts or elements of the manuscript:
- the right to reproduce and distribute the manuscript in printed form, including print-on-demand;
- the right to print prepublications, reprints and special editions of the manuscript;
- the right to translate the manuscript into other languages;
- the right to reproduce the manuscript using photomechanical or similar means including, but not limited to photocopy, and the right to distribute these copies;
- the right to reproduce and distribute the manuscript electronically or optically using and all data carriers or storage media, and especially in machine readable/digitalized form on data carriers such as hard drive, CD-ROM, DVD, Blu-ray Disc (BD), Mini Disc, data tapes, and the right to reproduce and distribute the article via these data carriers;
- the right to store the manuscript in databases, including online databases, as well as the right to transmit the manuscript in all technical systems and modes;
- the right to make the manuscript available to the public or to closed user groups on individual demand, for use on monitors or other readers (including e-books), and in printable form for the user, either via the Internet, online service, or via internal or external networks.
Authors reserve the copyright to published articles and have the right to use the article in the same manner like third parties in accordance with the licence Attribution-Non-Commercial-Non-Derivate 4.0 International (CC BY). Thereby they must quote the basic bibliographic data of the source article published in the journal (authors, article title, journal title, volume, pagination).
Barro, R. (1990). Government Spending in a Simple Model of Endogenous Growth. Journal of Political Economy, 98(5), S103-126.
Barro, R., & Lee, J.-W. (2013). A new data set of educational attainment in the world, 1950–2010. Journal of Development Economics, 104(C), 184-198.
Baumol, W. (1967). Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis. American Economic Review, 57(3), 415–426.
Baumol, W., Blakman, A., & Wolff, E. (1985). Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence. American Economic Review, 75, 806 - 817.
Ciccone, A., & Papaioannou, E. (2009). Human Capital, the Structure of Production, and Growth. Review of Economics and Statistics, 91(1), 66-82.
Eichengreen, B., & Gupta, P. (2013). The two waves of service-sector growth. Oxford Economic Papers, 65, 96–123.
Feenstra, R. C., Inklaar, R., & Timmer, M. P. (2015). The Next Generation of the Penn World Table. American Economic Review, 105(10), 3150-3182.
Gries, T., & Redlin, M. (2012). Trade Openness and Economic Growth: A Panel Causality Analysis. Paderborn University, CIE Center for International Economics, Working Papers CIE No, 52.
Hall, R. E., & Jones, C. (1999). Why do Some Countries Produce So Much More Output Per Worker than Others? Quarterly Journal of Economics, 114(1), 83-116.
Islam, N. (1995). Growth Empirics: A Panel Data Approach. The Quarterly Journal of Economics, 4(1), 1127–1170. doi:https://doi.org/10.2307/2946651
Islam, N. (2003). What have We Learnt from the Convergence Debate? Journal of Economic Surveys, 17(3), 309-362.
Jäger, K. (2017). EU KLEMS Growth and Productivity Accounts 2017 release - Description of Methodology and General Notes. mimeo, The Conference Board.
Jones, C. (2005). Growth and Ideas. In P. Aghion & S. Durlauf (Eds.), Handbook of Economic Growth (Vol. 1, Part B, pp. 1063-1111): Elsevier.
Lucas, R. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3-42.
Mankiw, N. G., Romer, D., & Weil, D. (1992). A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics, 107(2), 407-437.
Marelli, E. (2004). Evolution of employment structures and regional specialisation in the EU. Economic Systems, 28, 35-59.
Maroto-Sánchez, A., & Cuadrado-Roura, J. R. (2009). Is growth of services an obstacle to productivity growth? A comparative analysis. Structural Change and Economic Dynamics, 20(4), 254–265.
Moral-Benito, E. (2012). Determinants of Economic Growth: A Bayesian Panel Data Approach. Review of Economics and Statistics, 94(2), 566-579.
Pavitt, K. (1984). Sectoral patterns of technical change: towards a taxonomy and a theory. Research Policy, 13, 353–369.
Peneder, M. (2003). Industrial structure and aggregate growth. Structural Change and Economic Dynamics, 14, 427-448.
Peneder, M. (2003). Industry Classifications: Aim, Scope and Techniques. Journal of Industry, Competition and Trade, 3(1), 109-129.
Peneder, M. (2007). A sectoral taxonomy of educational intensity. Empirica, 34(3), 189-212.
Pugno, M. (2006). The service paradox and endogenous economic growth. Structural Change and Economic Dynamics, 17(1), 99-115.
Robinson, C., Stokes, L., Stuivenwold, E., & Ark, B. v. (2003). Industry structure and taxonomies. In M. Mahony & B. V. Ark (Eds.), EU productivity and Competitiveness: An Industry Perspective. Can Europe Resume the Catching Up Process? Luxembourg: Enterprise Publications, European Commission.
Rodríguez-Pose, A., & Tselios, V. (2009). Education and income inequality in the regions of the European Union. Journal of Regional Science,, 49, 411–437.
Rodrik, D. (2013). Structural change, fundamentals, and growth: an overview. mimeo, Institute for Advanced Study.
Romer, P. (1990). Endogenous Technological Change. Journal of Political Economy, 98(5), S71-102.
Silva, E. G., & Teixeira, A. A. C. (2008). Surveying structural change: seminal contributions and a bibliometric account. Structural Change and Economic Dynamics, 19, 273–300.
Silva, E. G., & Teixeira, A. A. C. (2011). Does structure influence growth? A panel data econometric assessment of ‘relatively less developed’ countries, 1979-2003. Industrial and Corporate Change, 20(2), 433-455.
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, 70(1), 65-94.
Teixeira, A. A. C., & Fortuna, N. (2011). Human capital, R&D, trade, and long-run productivity. Testing the technological absorption hypothesis for the Portuguese economy, 1960–2001. Research Policy, 39(3), 335- 350.
Tidd, J., Bessant, J., & Pavitt, K. (2005). Managing innovation: integrating technological, market and organizational change. New York: Wiley.