Regional Differences in Intersectoral Linkages and Diverse Patterns of Structural Transformation

Saumik Paul () and Dhushyanth Raju
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Saumik Paul: University of Manchester

No 15461, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Intersectoral linkages can act as shock propagation channels and shape the pattern of structural transformation. To our knowledge, no research has examined how subnational differences in intersectoral linkages impact such spillover effects. We hypothesize that regional differences in local economic shocks diversify intersectoral linkages, and, consequently, produce divergent patterns of structural transformation across regions. Using novel regional input-output tables and existing enterprise censuses for Ghana, we test and find support for four predictions related to this hypothesis: (1) a recent, positive mining output shock that occurred in the south of Ghana leads to growing differences in intersectoral linkages between the north and the south of the country, (2) the effect of the mining output shock on output and productivity growth in other sectors differs across regions in line with changes in the patterns of intersectoral linkages, (3) the elasticity of employment in other sectors with respect to the change in employment in mining closely follows the regional patterns of intersectoral linkages, and (4) variation in the mining output shock across time and space explains the variation in the rate of firm entry and average firm-level employment in sectors (such as heavy manufacturing) that largely depend on mining for intermediate inputs.

Keywords: structural transformation; intersectoral linkages; propagation of productivity shock; subnational areas; mining; Ghana (search for similar items in EconPapers)
JEL-codes: D24 D57 E32 F15 F43 L14 N10 O11 O14 O47 Q54 (search for similar items in EconPapers)
Pages: 77 pages
Date: 2022-07
New Economics Papers: this item is included in nep-dev, nep-ino, nep-tid and nep-ure
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