The Distribution Sector and the Development Process: Are There Patterns? Yes
James Anderson () and
Roger Betancourt ()
Electronic Working Papers from University of Maryland, Department of Economics
In this paper we bring together three different strands of literature to raise and answer the question posed in the title. The literature in the Kuznets tradition applied to services raises the question of whether the pattern observed for services, namely a rising share of GDP, is also observed for the distribution sector. The literature on the retail and wholesale sector, on the other hand, indicates the existence of economies of scale in the provision of the distribution services that constitute a main output of this sector. Hence, one would expect a different pattern for distribution than for services because the standard assumption in explaining the pattern for services is that the services sector experiences constant returns to scale. By linking the literature on economic development and specialization with the literature on the distribution sector, we can show that an inverted-U pattern between the share of distribution and the level of development should be expected to arise. We construct a cross-section time series data set for 74 countries using UN national income accounts data to calculate the share of retail and wholesale trade in GDP and merge this data set with the one used by Syrquin and Chenery (1989)to analyze the service sector in general. In contrast to their results for services, we find an average time series relation between the share of distribution and the level of development that exhibits an inverted-U pattern with respect to the level of development. We also analyze the average cross-section (country) relation between the share of distribution and the level of development. In contrast to the results of Kravis, Heston and Summers(1983) for services, we also find an inverted-U pattern between the share of distribution and the level of development in this setting.
Keywords: Distribution Sector; Development Process; Increasing Returns; Specialization (search for similar items in EconPapers)
JEL-codes: O10 L81 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://www.econweb.umd.edu/~betancourt/distribution/betancourt9902.pdf Full text (application/pdf)
Journal Article: The Distribution Sector and the Development Process: are there Patterns? Yes (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:umd:umdeco:99-007
Ordering information: This working paper can be ordered from
Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742
Access Statistics for this paper
More papers in Electronic Working Papers from University of Maryland, Department of Economics Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742.
Bibliographic data for series maintained by Peter Murrell ().