How Has Globalisation Affected the Economic Growth, Structural Change and Poverty Reduction Linkages? Insights from international comparisons

Research output: Working paperResearch

Abstract

This paper examines economic growth, structural change and poverty reduction linkages across 147 countries of the world during 1991-2015. It emphasises that under the liberal market growth model structural change-growth linkages are complex, which in turn can complicate the poverty reduction effects of growth. It proposes a conceptual framework to explain how growth and structural dynamics have been influenced by globalisation. It argues that at the core of the conventional growth-structural change relationship lies the assumption that economic activities within and across sectors are strongly connected with each other through forward and backward linkages. Globalisation may distort this connectedness affecting different sectors asymmetrically. As a result, structural change in value added and employment may not commensurate with each other exerting ambiguous effects on cross-sector productivity dispersions. The study hypothesises that the convergence between them is critical for productivity enhancing structural change, and in turn, for poverty reducing effects of growth. The generalised method of moments (GMM) estimator within the framework of a dynamic panel data approach upholds the hypothesis. These findings question the sustainability of the growth and structural change processes taking place in the developing world and call for deeper strategic government interventions for broad based economic development with an emphasis on manufacturing.
Original languageEnglish
Place of PublicationMaastricht
PublisherMaastricht Economic and Social Research institute on Innovation and Technology
Number of pages34
Publication statusPublished - 2019
SeriesUNU-MERIT Working Papers
Number2019-015
ISSN1871-9872

Keywords

  • Economic growth
  • Globalisation
  • Structural change
  • Poverty reduction
  • Cross country analysis

Cite this

Aggarwal, A. (2019). How Has Globalisation Affected the Economic Growth, Structural Change and Poverty Reduction Linkages? Insights from international comparisons. Maastricht: Maastricht Economic and Social Research institute on Innovation and Technology. UNU-MERIT Working Papers, No. 2019-015
Aggarwal, Aradhna. / How Has Globalisation Affected the Economic Growth, Structural Change and Poverty Reduction Linkages? Insights from international comparisons. Maastricht : Maastricht Economic and Social Research institute on Innovation and Technology, 2019. (UNU-MERIT Working Papers; No. 2019-015).
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How Has Globalisation Affected the Economic Growth, Structural Change and Poverty Reduction Linkages? Insights from international comparisons. / Aggarwal, Aradhna.

Maastricht : Maastricht Economic and Social Research institute on Innovation and Technology, 2019.

Research output: Working paperResearch

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Aggarwal A. How Has Globalisation Affected the Economic Growth, Structural Change and Poverty Reduction Linkages? Insights from international comparisons. Maastricht: Maastricht Economic and Social Research institute on Innovation and Technology. 2019.