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East Asian Economic Review Vol. 12, No. 2, 2008. pp. 183-220.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.2008.12.2.192

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An Empirical Analysis on the Effect of Service Economy in Indian Economic Growth

Author

Choongjae Cho

cjcho@lotte.net
Creative Commons Attribution License

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

This study aims to analyze the effects of service economy in Indian economic growth. In consequence of empirical tests, the enlargement of the service sector in GDP has been a negative effect on the economic growth. However, the enlargement of service sector in trade and sub-service sector in total services has given an unclear effect on the economic growth. The results are induced by much labor movement into services other than manufacturing sectors from agriculture sectors as Baumol's hypothesis (1967). The results suggest that a stronger incentive policy for the manufacturing sector is needsed by the Indian government and the possibility of reduction in its significance exists because of the particularities of the Indian economy simultaneously.

JEL classification: L8, O1, O53

Keywords

Indian Economy, Service Economy, Service, Economic Growth

Language

Korean

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