Evidence of the importance of industry and services for the economic growth of Brazilian municipalities

Abstract The literature based on Kaldor defends industry as the engine of economic growth. However, recent studies highlight the relevance of services to increase growth. Contributing to the discussion, the objective of this paper is to evaluate the effects of industry and service shares on the GDP of Brazilian municipalities per capita growth. We also investigate whether there are heterogeneous effects due to the municipal GDP per capita level and the relative importance of these sectors according to the economies of the municipalities. To do so, we estimate panel data models from 1999 to 2012. The evidence indicates that industry plays an important role in the growth of municipalities with lower income levels. However, regarding municipalities with higher income levels, services are an extremely important engine of growth. The evidence also suggests that the relationships between economic growth and the two sectors’ shares in GDP have a shape close to an "inverted U".

摘要：基于卡尔多（Kaldor）的相关研究均将工业视作经济增长的核心引擎。然而，近期研究则凸显了服务业对经济增长的关键推动作用。本文旨在为该学术讨论贡献新的研究视角，具体而言，本文将评估工业与服务业占GDP的比重对巴西各市级行政区人均GDP增速的影响。此外，本文还将考察：基于各市级行政区的人均GDP发展水平，以及两大部门在当地经济中的相对重要性，是否存在异质性的影响效应。为此，本文构建了1999年至2012年的面板数据模型并进行估计。研究结果表明，工业对低收入层级的巴西市级行政区的经济增长具有显著的推动作用；而对于高收入层级的市级行政区，服务业则是极为关键的增长引擎。同时，研究证据还显示，经济增长与两大部门GDP占比之间的相关关系曲线近似呈现“倒U型”形态。