Growth and the Services Sector: The Portugal Case

Marta S. S. Ramos and Marta Simões ()
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Marta S. S. Ramos: University of Coimbra, Faculty of Economics

Chapter 17 in Contemporary Issues in the Integration Processes of Western Balkan Countries in the European Union, 2011, pp 271-287 from Institute of Economic Sciences

Abstract: Does the increasing tertiarisation of an economy have the potential to sustain its growth rate? This work aims at contributing to this debate from a Portuguese perspective by conducting a characterization of the services sector in Portugal for the period 1970-2005/8. We first analyze the services sector as a whole, and then consider different sub-sectors based on the division of this sector into two broad categories, modern impersonal services and traditional personal services. At the aggregate level, the productivity performance of the Portuguese services sector is low relative to that of selected more advanced countries. This is due to the strong weight of traditional services. However, modern services show a great potential to increase its productivity and participation in international trade. Portugal should thus focus on the development of transport and communications and finance and business services sub-sectors in order to overcome the negative productivity and standards of living differentials relative to most of our European partners. Decisio makers should also not forget that there is ample scope for some traditional services to benefit from recent technological advances and thus turning into modern services.

Keywords: Structural change; services sector; productivity; economic growth (search for similar items in EconPapers)
JEL-codes: O14 O30 O47 (search for similar items in EconPapers)
Date: 2011
ISBN: 978-961-93203-0-3
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