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The purpose of this paper is to present an empirical study of the contribution of the services sector to per capita economic growth for Pacific Island countries.

Within the new growth theory framework, the empirical procedure consisted of the regression analysis of data using the panel data fixed effects procedure.

The results confirm the positive and statistically significant correlation of services growth to per capita gross domestic product growth.

Limitations largely centre on the use of aggregate cross‐country data. Variations may be found in what actually drives the services growth at the country level. Thus, a country‐specific study would be more appropriate in order to get more robust results. Also, the data do not capture the effect of non‐market services. Disaggregate services data that separate market data services with non‐market services would provide a more accurate picture of the influence of non‐market services.

The practical implication is that that service sectors in the Pacific Island countries ought to be given greater support, for example, investment in physical and institutional infrastructure, market access, financial support, skill development and investment incentives.

Pacific Islands services sectors contribute to household welfare through paid employment and meet household demands of service sector output.

This paper presents the first study among the Pacific Island countries that has examined the importance of services sector and its contribution to growth. The findings of this study are useful to Pacific policy makers in terms of improving the services sector through instituting appropriate growth enhancing policies.

In India, economic reforms adopted in 1991 in form of LPG (Liberalization-Privatization-Globalization) removed numerous barriers to grow and offered opportunities to improve productivity, particularly, for the manufacturing sector. But the rationale that manufacturing sector acted as main contributor to country's economic growth via GDP growth (called “engine of growth”) for a long time in India has been challenged now a day. The growing significance of the services sector across the world exhibits that at the present time, the services sector could become the new engine of economic growth in developing economies like India. The present study seeks to bring to light whether manufacturing is acting as an “engine of growth” at inter-state level in India or not and the cross section result indicates that potency of manufacturing growth and agricultural growth is gradually slowing down as a conforming part of economic growth and service sector is taking leading position in accelerating engine of growth in India.

In the Lao People’s Democratic Republic (Lao PRD), the services sector accounts for more than 41% of GDP and more than 80% of total trade (World Bank, 2021). Empirical studies show that most of the services trade occurs in the travel and tourism sectors, accounting for more than 50% of the total services trade in the Lao PDR. The services sector also plays an essential role in the Lao PDR’s wholesale and retail sectors, which employ the most significant number of people across all services sectors. The services trade balance was in a surplus between 1997 and 2011, though in 2012, it entered a significant deficit that continues to the present. This study investigates the link between services trade and economic growth in the Lao PDR, building on a recent analysis of the services trade in various economic and economic growth. The authors use econometric methods such as the autoregressive distributed lag (ARDL) bound test and the Granger causality test to analyze time-series data for the Lao PDR from 1990 to 2019. The econometric results demonstrate the long-run relationship between economic growth and variables related to the services trade. This indicates the government and policymakers of the Lao PDR should invest in infrastructure, particularly in trade facilitation and the liberalization of the services sector, to facilitate the acceleration of economic growth.

The purpose of this paper is to determine if the relationship between growth and research and development (R&D) intensity is of a different nature in the context of low‐ and high‐tech Portuguese service small to medium‐sized enterprises (SMEs).

The System Analysis of Iberian Balance Sheets database is used. Based on the European Union's recommendation, L124/36 (2003/261/CE), the authors select 764 low‐tech and 139 high‐tech Portuguese service SMEs for the period 1999‐2006. As method of analysis, panel data are used.

A negative relationship between growth and R&D intensity for low‐tech Portuguese service SMEs is identified, whatever the level of R&D intensity. For high‐tech Portuguese service SMEs, a quadratic U‐shaped relationship between growth and R&D intensity is identified. Moreover, the authors find that relationships between growth and determinants are of a special nature in the context of high‐tech Portuguese service SMEs with high levels of R&D intensity.

It is recommended that as far as possible the managers/owners of low‐tech Portuguese service SMEs, and especially high‐tech ones with non‐high levels of R&D intensity, hire qualified human resources and make more continuous investment in R&D. The authors advise managers/owners of high‐tech Portuguese service SMEs with high levels of R&D intensity to establish stable relationships with creditors. Policy‐makers should increase financial support directed, above all, to innovative Portuguese service SMEs.

The paper is pioneering in presenting different relationships between growth and R&D intensity in the context of low‐ and high‐tech service SMEs.

The dynamics of economic growth in India continues to engage economists and still remains much debated. The trends and patterns of growth observed in India have seen acceleration in growth in Indian economy in the period following macroeconomic reforms and policy changes in investment and trade regimes. However, when and how did India transform itself from Hindu rate of growth to the present growth regime continues to be debated.

Using INDIA KLEMS data set, this study provides a distinctive perspective on India’s economic growth. A unique data set comprising 27 sectors of Indian economy at a disaggregate industry level for a period of 30 years, beginning 1980s, attempts to understand the dynamics of India’s growth from the contribution of industries that comprise the Indian economy.

This productivity data set offers a new way of analyzing the dynamics of growth including the sources of growth. The growth empirics allow evaluation of the relative significance of total factor productivity growth vis-a-vis input accumulation in accounting for output growth. In addition, the authors were able to document the industry contributions to aggregate growth. In this way, they were able to analyze the importance of the constituent industries within the different sectors of the economy − agriculture, manufacturing, construction and market, as well as non-market services in accounting for the observed growth in India. In conclusion, the industry perspective offers a new and analytical way of discerning new aspects of India’s march to higher growth regimes in post-1990s era.

A unique data set comprising 27 sectors of Indian economy at a disaggregate industry level for a period of 30 years, beginning 1980s, attempts to understand the dynamics of India’s growth from the contribution of industries that comprise the Indian economy.

India started economic reforms at a rapid pace to catch up the world economy by following the services-led-growth model during the post-liberalisation period. Over the years, the growing unemployment rate posits a re-look into the dynamics of growth model for wider work force participation. In this backdrop, the paper aims to examine the dynamics of structural changes in employment pattern in view of economic growth led by services-led growth model in India.

The study employs a non-linear autoregressive model (NARDL) to examine the effect of the growth rates in three broad economic sectors namely agriculture and allied, services and industry on work force participation representing the employment opportunities in India.

The results highlight that the rapid expansion of the service sector has not occurred with enough employment opportunities by the same rate. By contrast, the growth in the industrial sector significantly creates employment opportunities in the short and long run. These results support the industry led growth model over the services for sustainable and inclusive economic growth in the country.

The study relies on combined labour force participation rates rather than gender-specific rates. Further, the regulatory, working conditions and economic incentives may affect the gender-specific engagement of the labour force in three broad sectors.

The results offer important insight into changing patterns in employment with policy lessons. A wider workforce force participation calls for expansion of manufacturing activities through pro-industry programmes.

The study makes pioneer efforts to examine the dynamics of labour force participation with respect to the growth of three broad economic sectors of the Indian economy. The results provide new insights with policy implications for the changing employment pattern and policy response.

Stable high growth in the service sector has made India free from the stigma of slow and steady ‘Hindu rate of growth’ of about 3.5% per annum during the first three decades of independence. Service-led growth has placed India among the top performing giant economies in the world. India is now a 3 trillion USD (United States Dollar) economy in terms of Nominal GDP (IMF, 2020). Under this milieu, the chapter aims to examine whether the growth in the service sector in India is inclusive or not. The observations of the study have shown that the service sector has been growing at fast pace compared to the other two sectors, which makes the system into jobless status. The sectoral contribution of service sector to the GDP is increasing after the new economic reform of 1990, but the employment contribution is going down. So the country is now in the grip of ‘jobless’ growth, and the grip is strengthening because of some structural issues such as changes in consumers’ demand with rising per capita income. Further deepening of finance capital in the savings sphere of service sector has made the wide disconnect between the real economic activity and growth of finance capital. Revival of high linkage sectors with higher potential for employment growth, such as agriculture and manufacturing, can be game changer towards the goal of inclusiveness.

Although an East Asian miracle, Singapore has been singled out for experiencing insignificant total factor productivity (TFP) growth, thereby reflecting limited potential for long‐term growth. Examines the validity of this statement for the services sector, which is an important engine of growth for Singapore. This is done using panel data with a stochastic frontier model, which, unlike the conventional growth accounting model used by previous studies, not only decomposes output growth into input growth and TFP growth but further decomposes TFP growth into technological progress and changes in technical efficiency. In addition, the stochastic frontier model incorporates the more realistic non‐neutral shifting production frontier, as opposed to the commonly assumed Hicks‐neutral production technology underlying a production function.

It is commonly argued that many economies must look toward a service‐based future. This article discusses the role of the service sector in generating economic growth and employment. It is argued that defining, measuring and distinguishing service output as opposed to output of goods has become increasingly difficult, which makes the traditional attempts to define a specific role for the service sector more or less futile. Instead, the diverse activities performed within the service sector form an integral part of a well‐functioning economy as a whole. Moreover, there is nothing inherently “wrong” with service sector jobs: recent experience suggests that the service sector has generated disproportionately both good quality, well‐paid jobs, as well as those in the lowest category. Worrying about the relative size of the service sector helps us little: what matters is each sector’s contribution to overall productivity growth.