Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter September 25, 2015

Expansion of Services Output Share: Traditional Factors or Policy Changes?

  • Amrita Roy EMAIL logo
From the journal Global Economy Journal


This paper seeks to find whether the shift in the production structure away from agriculture to services is only the result of the change in income status or the changing economic relations among countries has any important role to play here. It tries to find out the factors responsible for the huge expansion of the services output in recent times (1971–2009) considering three different samples (a) a group of developed and developing countries, (b) a group of developing countries, in particular and also (c) the case of India. The paper finds that along with the variables representing changing income status and technological development, policy changes related to globalization and liberalisation are also important but these policy variables can not explain the shift in the output share of the service sector in the 1990s.

JEL Classification: L16; O10; O14


The author is grateful to Dr. Subrata Guha for his valuable comments and suggestions.


Table 5:

Regressing the share of service sector output in GDP after logit transformation (S) and the share of industrial sector output in GDP (iy) on the explanatory variables: (Results).

Independent variablesDependent variable (S)Dependent variable (iy)
No. of observations23042304


Bhattacharya, B. B. and A. Mitra 1960. “Excess Growth of Tertiary Sector in Indian Economy, Issues and Implications.” Economic and Political Weekly 25 (15):2445–50.Search in Google Scholar

Chenery, H. B. 1990. “Patterns of Industrial Growth.” American Economic Review 57:415–26.Search in Google Scholar

Chenery, H., and M. Syrquin. 1975. Pattern of Development 1950–1970. Oxford: Oxford University Press.Search in Google Scholar

Clark, C. 1940. The Conditions of Economic Progress. London: MacMillan and Co. Ltd.Search in Google Scholar

Dasgupta, S., and A. Singh. 2006. “Manufacturing, Services and Premature Deindustrialization in Developing Countries, A Kaldorian Analysis”. Research Paper No. 2006/49, World Institute for Development Economics Research, United Nations University.10.1057/9780230801462_23Search in Google Scholar

Eichengreen, B., and P. Gupta. 2011. “The service sector as Indian’s road to economic growth”. National Bureau of Economic Research working paper series, working paper no. 16757, Cambridge.10.3386/w16757Search in Google Scholar

Eichengreen, B., and P. Gupta. 2013a. “Exports of Services: Indian Experience in Perspective.” Indian Growth and Development Review 6 (1):35–60.10.1108/17538251311329540Search in Google Scholar

Eichengreen, B., and P. Gupta. 2013b. “The Two Waves of Service-Sector Growth.” Oxford Economic Papers 65 (1):96–123.10.3386/w14968Search in Google Scholar

Fiala, R. 1983. “Inequality and the Service Sector in Less Developed Countries: A Reanalysis and Respecification.” American Sociological Review 48 (3):421–8.10.2307/2095234Search in Google Scholar

Fisher, A. G. B. 1939. “Production, Primary, Secondary and Tertiary.” Economic Record 15:24–38.10.1111/j.1475-4932.1939.tb01015.xSearch in Google Scholar

Gani, A., and D. M. Clemes. 2002. “Services and Economic Growth in ASEAN Economies.” ASEAN Economic Bulletin 19:155–69.10.1355/AE19-2CSearch in Google Scholar

Gordon, J., and P. Gupta. 2004. “Understanding India’s Services Revolution.” Working Paper No. WP/04/171, International Monetary Fund.10.5089/9781451858532.001Search in Google Scholar

Greenhalgh, C., and M. Gregory. 2001. “Structural Change and the Emergence of the New Service Economy.” Oxford Bulletin of Economics and Statistics 63:629–46.10.1111/1468-0084.63.spe1.2Search in Google Scholar

Kuznets, S. 1966. Modern Economic Growth: Rate, Structure and Spread. New Haven: Yale University Press.Search in Google Scholar

Nicoletti, G. 2001. “Regulation in Services: OECD Patterns and Economic Implications”. Working Papers No. 287, OECD Economics Department, OECD Publishing.10.2139/ssrn.259773Search in Google Scholar

Park, D., and K. Shin. 2012. “The Services Sector in Asia: Is It an Engine of Growth.” Working Paper Series, WP 12–21, Peterson Institute for International Economics.10.2139/ssrn.2198154Search in Google Scholar

Pilat, D., and A. Wolfl. 2005. “Measuring the Interaction between Manufacturing and Services.” OECD STI Working Papers 2005/5, Statistical Analysis of Science Technology and Industry.Search in Google Scholar

Pindyuk, O., and J. Wörz. 2008. “Trade in Services: Note on the Measurement and Quality of Data Sources.” Forschungsschwerpunkt Internationale Wirtschaft Research Report.Search in Google Scholar

United Nations. 2004. World Investment Report: The Shift Towards Services. New York and Geneva: UNCTAD. United Nations Publication.Search in Google Scholar

Wolfl, A. 2005. “The Service Economy in the OECD Countries.” OECD STI Working Papers 2005/3, Statistical Analysis of Science Technology and Industry.Search in Google Scholar

World Bank. 2010. World Development Indicators 2010. The World Bank.Search in Google Scholar

Published Online: 2015-9-25
Published in Print: 2015-9-1

©2015 by De Gruyter

Downloaded on 5.12.2023 from
Scroll to top button