Specialize rightly or decline

Abstract

Is exporting potato chips really the same than exporting microchips for a country economic growth? Is the rate of economic growth independent on the production/export structure? Is moving toward dynamic sectors a key for economic growth? This paper exploits a panel dataset for 188 countries and almost 700 sectors over the 1960-2004 period. Our purpose is to determine if and how sectoral structure influences the rate of economic growth, both from a static and a dynamic perspective. Different theoretical lines of research give suggestion in this direction: both past keynesian contributions and the endogenous growth literature suggest that economic structure can play an effective role in influencing economic growth. Our empirical analysis, shows that there is some evidence of this kind. We test the robustness of our result, checking the sensitivity of our main result to several alternatives