Item

Productivity growth and the ascendancy of the service sector in New Zealand

Stockham, Jamie M.
Date
1998
Type
Thesis
Fields of Research
Abstract
The ascendancy of service sectors in developed economies over the last quarter century has raised questions. Some have asserted that it is the cause of the productivity slowdown that has beset industrialised nations since the early 1970s. Recently, however, it has been argued that the growth of service sector may actually be a significant catalyst of growth. The issue is complicated by the difficulties involved with measuring service sector productivity. This research seeks to explain whether the ascendancy of the service sector has helped or hindered productivity growth in New Zealand. It uses a neoclassical growth equation model, which is extended to incorporate structural disequilibrium and cross-sector externalities. Evidence is found that the service sector exhibits greater productivity than the remainder of the economy. No evidence is found of significant cross-sector externalities, although accurate estimation of this parameter is made difficult by multicollinearity problems. The economic reforms of the mid 1980s are found not to have induced a structural break in the trend rate of productivity growth.
Source DOI
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