GTAP Resources: Resource Display
| GTAP Resource #7548 |
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"Trade policy and structural transformation: Towards services economy in Africa?" by Sawadogo, Bouraima, FOUOPI DJIOGAP Constant and Moukaila Mouzamilou Takpara Abstract The objective of this paper is to make an empirical appraisal to identify the key drivers of structural transformation in Sub-Saharan Africa (SSA) by focussing on the effect of services trade. The study focuses on 18 SSA selected countries over 1991 – 2018. By using Fabricant's (1942) decomposition method, total factor productivity growth is divided into within-sector productivity growth, static labour reallocation between sectors, and dynamic labour reallocation. The findings reveal that SSA's total labour productivity grew by 2.33% from 1991 to 2018, driven mainly by static inter-sectoral reallocation. The empirical strategy combines the Pool Mean Group (PMG), the Dynamic Common Correlated Effects (DCCE) methods to estimate the parameters of our models. We then used local projection analysis approach to identify the impulse response of the structural change indicators to shock in services trade and to the global financial crisis (GFC). The results reveal on the one hand that, in Long-term trade openness in services, particularly in transport, travel, and ICT services, positively influences productivity growth and labour movement towards productive sectors. On the other hand, the robustness of these results is confirmed using the DCCE estimator. Global shocks on trade in services as well as the GFC have varying effects, highlighting the transient and unpredictable nature of economic shocks on structural transformation in SSA. Policy recommendations include enhancing the role of services in productivity growth, liberalizing the services sector to attract FDI, and improving economic resilience to external shocks. |
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- Economic development - Labor market issues - Trade in services - Dynamic modeling - Econometric methods - Africa (Central) - Africa (East) - Africa (North) - Africa (Southern) - Africa (West) |
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Public Access  GTAP Resource 7548 (1.6 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions The views expressed in this paper are the authors own, not representing the ones from their respective organizations. |
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Last Modified: 9/15/2023 2:05:45 PM
