The economic development literature has long recognized the role of sectoral changes in growth. In particular, the idea that factor reallocation contributes to total factor productivity growth -and thus to GDP growth- has often been emphasized (Syrquin, 1986). An early work by Robinson (1971) has put this idea into a formal set-up, constituting what he calls a "model of structural change and growth." In this model, capital and labor reallocation have a positive effect on GDP growth due to the assumption that marginal factor productivity is higher in the non-agricultural sector compared to the agricultural. The empirical results in Robinson (1971), obtained for a sample of 39 developing countries over the period 1958-66, suggest that the contribution to growth of factor transfers is important for developing countries: it is higher than the estimated contributions of reallocation to growth in the United States and Western Europe
Bibliography
Includes bibliographical references (pages 28-29)
Notes
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