Production by sector in China, India and OECD Countries, 1985-2005

Abstract

We analyse the evolution of production by sector in Agriculture, Industry and Services in China and India in comparison with the European Union, United States, Japan and other OECD countries, during the period 1985-2005, with particular focus on the important positive role of manufacturing, trade and other factors on the development of services, at country level in OECD countries and at country and regional level in China and India. We present an international cross-section model to estimate the impact of industry on services with a sample of 32 countries for the period 1985-2005. The main conclusion is the convenience to foster industrial development in India in order to reach a higher degree of convergence with China and to evolve towards the average level of OECD countries. To achieve this goal domestic policies and international cooperation should include as one of the main priorities to increase the educational level of population.