Growth Empirics: Structural Transformation and Sectoral Interdependencies of Sri Lanka
Jayasooriya, S. P. | April 2017
Abstract
Even though the impacts of the globalization on economic growth and structural changes are inevitable, many developing countries are slowly transformed in the process. This paper examines the impact of structural transformation of Sri Lanka’s economy on sectoral interdependencies to provide evidence for policy making. It advocates policies, investigating the relationship among agricultural, industrial, and service-related gross domestic products (GDPs) under (i) an open economic policy setting, (ii) different government policy regimes, and (iii) major policy eras from 1950 to 2015. The analysis uses secondary data from the Central Bank of Sri Lanka and the Institute of Policy Studies publications. A time-series econometric method, vector autoregression, was used including causality analysis, and Gregory-Hansen cointegration, for estimating a long-run relationship in sectoral growth. The empirical investigations revealed an existence of unidirectional causality toward agricultural to industrial GDP, and bidirectional causality between agricultural and service GDPs in terms of Sri Lanka’s economy. The effect of Gregory-Hansen co-integration affirmed a long-run nexus in agricultural growth positively with industrial and service growth. Apart from that, the evidence of structural change through open economic policies depicted a significant impact between pre-open economic and post-open economic policies for a drastic economic growth even under structural break. Although none of the policy regimes have prejudiced economic growth, reforms can be initiated to ascertain the revival of economic growth, and promoting service sector-related economic systems are desirable with reforming policies.
Citation
Jayasooriya, S. P.. 2017. Growth Empirics: Structural Transformation and Sectoral Interdependencies of Sri Lanka. © Asian Development Bank Institute. http://hdl.handle.net/11540/7288.Keywords
Development strategy
Development models
Economic development
New technology
Rural planning
Aid coordination
Industrial projects
Infrastructure projects
Natural resources policy
Educational development
Absorptive capacity
Development Planning
Development Research
Technology Development
Aid And Development
Asian Development Bank
Comprehensive Development Framework
Development Cooperation
Development Management
Development Planning
Development Strategies
Rural planning
Regional development bank
Project finance
Strategic planning
Infrastructure projects
Government programs
Public finance
Public enterprises
Development
Economics
Development In East Asia
Development Planning
Development Research
Technology Development
Aid And Development
Asian Development Bank
Comprehensive Development Framework
Development Cooperation
Development Management
Development Planning
Development Strategies
Development strategy
Development models
Economic development
New technology
Rural planning
Aid coordination
Industrial projects
Infrastructure projects
Natural resources policy
Educational development
Absorptive capacity
Economic development projects
Economic forecasting
Economic development projects
Municipal government
Technology transfer
Exchanges of patents and technical information
Technical education
Technology
Communication in rural development
Communication in community development
Economic development projects
Development banks
Economic forecasting
Environmental auditing
Cumulative effects assessment
Human rights and globalization
Transfer Technocracy
Absorptive capacity
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