Structural Change as a Source of Growth: An Empirical Evidence from OECD Countries

다국어 초록 (Multilingual Abstract)

From the economic development perspective, economic growth should accompany structural improvement in order to meet complex demands from a society. In the context of development economics, economic growth is critically dependent on successful structural advancement. The issue of structural change is also important for advanced economies as the landscape of modern industry is changing fast. Many advanced countries of slow growth are experiencing dawdling changes in industry structure. However, there is no definitive answer to the question of whether there is a causal relationship between structural change and growth. This study empirically assesses the relationship between structural change or 'speed' thereof and economic growth in developed countries of OECD. Rather than looking into the causes of structural changes, this study simply measures structural changes in OECD economies and examines if structural change is really contributing to growth. The reason why this study focuses on advanced countries of OECD is rather obvious; technological innovation and emergence of new industries pressure these countries to restructure their economies to address these new challenges though they are at stages well beyond conventional industrialization. And structural rigidity can always limit growth even in advanced countries. The main results of this study can be summarized as a positive relationship between 'change and growth'. 'Change' in this study refers to changes in the industrial structure based on value-added and was analyzed to have a close positive relationship with economic growth. This result is consistent with arguments of early development economists emphasizing structural upgrade as an indispensable process for growth and development. The result of this study potentially confirms that the main argument of development economics is valid also for advanced economies. One of our results suggests that business/professional services and social services should be main targets for restructuring for advanced economies. The rational may be that rapid convergence of manufacturing and services is a key for structural advancement in the era of new technologies. Obviously, as manufacturing technology and production are standardized, it is difficult to secure international competitiveness through traditional manufacturing alone and the role of R&D, design, logistics, and marketing is becoming more important.