The Contribution of Industry and Agriculture Exports to Economic Growth: The Case of Developing Countries

Abstract

This paper provides an empirical approach to analyze the contributions of industry and agriculture exports and its impact on economic growth in developing countries. Historically, manufacturing has acted as an engine of economic growth. On the other hand, According to economists, agricultural sector offers two main functions: first, agriculture plays an important role as the most important source of resources for the development of industry and other non-agricultural sectors. Second, agriculture is substantial market for industrial products that helps modernize traditional production techniques by providing modern inputs, technology, and improve managerial skills. We examine the role of manufacturing and agriculture as a driver of growth in developing countries in the period 1970–2014. Using a panel data approach for 34 developing countries, the study finds that the linkage between industry exports and economic growth is positive and significant but the one for the agriculture and economic growth is weak. Also government final consumption and gross fixed capital formation have significant relation with economic growth.

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WSN 46 (2016) 100-111

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