Deconstructing the BRICs: Structural transformation and aggregate productivity growth

Gaaitzen de Vries, Abdul Azeez Erumban, Marcel Timmer, Ilya Voskoboynikov and Harry X. Wu

Journal of Comparative Economics, 2012, vol. 40, issue 2, 211-227

Abstract: This paper studies structural transformation and its implications for productivity growth in the BRIC countries (Brazil, Russia, India, and China) from the 1980s onwards. Based on a critical assessment of the reliability and consistency of various primary data sources, we bring together a new database that provides trends in value added and employment at a detailed 35-sector level. Structural decomposition analysis suggests that for China, India and Russia reallocation of labor across sectors is contributing to aggregate productivity growth, whereas in Brazil it is not. This confirms and strengthens the findings of McMillan and Rodrik [NBER Working Paper 17143, 2011]. However, this result is overturned when a distinction is made between formal and informal activities within sectors. Increasing formalization of the Brazilian economy since 2000 appears to be growth-enhancing, while in India the increase in informality after the reforms is growth-reducing.

Keywords: Economic growth; New structural economics; Structural change; BRIC countries (search for similar items in EconPapers)
JEL-codes: C80 N10 O10 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (91)

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Related works:
Working Paper: Deconstructing the BRICs: Structural Transformation and Aggregate Productivity Growth (2011)
Working Paper: Deconstructing The BRICs: Structural Transformation And Aggregate Productivity Growth (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:40:y:2012:i:2:p:211-227

DOI: 10.1016/j.jce.2012.02.004

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