Structural change and economic growth in selected emerging economies

Muhamed Zulkhibri, Ismaeel Naiya and Reza Ghazal

International Journal of Development Issues, 2015, vol. 14, issue 2, 98-116

Abstract: Purpose - – This paper aims to investigate the relationship between structural change and economic growth for a panel of four developing countries, namely, Malaysia, Nigeria, Turkey and Indonesia over 1960-2010. Design/methodology/approach - – The study extent the growth equation by incorporating degree of openness, labour and investment and construct structural change indices – modified Lilien index and the norm of absolute values. It utilizes the recently developed panel cointegration techniques to test and estimate the long-run equilibrium of the growth equation. Findings - – The results confirm that structural change and economic growth are cointegrated at the panel level, indicating the presence of long-run equilibrium relationship. However, the impact of structural change on economic growth seems to be small and evolve slowly. Originality/value - – The findings indicate the need for policymakers to identify the binding constraints that impede growth and the importance of institutionalize policy to encourage investment in productive sectors.

Keywords: Economic growth, Panel cointegration, Structural change, C12; C23 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijdipp:v:14:y:2015:i:2:p:98-116

DOI: 10.1108/IJDI-09-2014-0064

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