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Structure and performance of the services sector in transition economies
 
Author:Fernandes, Ana M.; Collection Title:Policy Research working paper ; no. WPS 4357
Country:Europe and Central Asia; Date Stored:2007/09/19
Document Date:2007/09/01Document Type:Policy Research Working Paper
SubTopics:Transport Economics Policy & Planning; Economic Theory & Research; Labor Policies; Labor Markets; E-BusinessLanguage:English
Region:Europe and Central AsiaReport Number:WPS4357
Volume No:1 of 1  

Summary: This paper examines the structure and performance of the services sector in Eastern European and Central Asian countries during 1997-2004. Services represent an increasing share of total value added and employment with the major sub-sectors being wholesale trade, retail trade, inland transport, telecommunications, and real estate activities. A clear divide separates EU-5 countries from South Eastern European countries and Ukraine in terms of services labor productivity. Although a large gap in productivity also separates EU-8 countries from EU-15 countries, that gap was reduced from 1997 to 2004 as most services sub-sectors experienced fast productivity growth. High skill intensive sub-sectors and information and communications technology producers and users have exhibited higher productivity levels and growth rates relative to other sub-sectors since 2000. The author finds a positive effect of services liberalization on the productivity growth of services sub-sectors. The author also finds a positive and significant effect of services liberalization in both finance and infrastructure on the productivity of downstream manufacturing.

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