Structural transformation and economic growth of Asia developing countries and Vietnam

Abstract

This paper investigates the structural transformation and growth of some developing Asian countries and Vietnam, using data extracted from World Development Indicator and Global Finance Development of orld Bank from 1985 to 2010. The paper uses polynomial model regression and description statistics method. Findings from the paper includes: (1) except Korea and Malaysia, others Asian developing countries are all in the first phase of structural transformation. Agriculture sector trends to decrease once GDP per capita increases. Industry sector trends to increase once GDP per capita increases. Service sector increases once GDP per capita increases; (2) the threshold of structural transformation from the first phase to the second phase is when GDP per capita equals US$ 6,600 per person. At that level, sectoral share of agriculture, industry, and services reach 7%, 45% and 48% respectively; (3) Asian developing countries including Vietnam are not all followed the same process and are not homogeneity of structural transformation; (4) compared to Malaysia, Thailand and the Philippines, the share of agriculture in GDP of Vietnam is still high and is the highest in the four countries. The share of services in GDP of Vietnam is always the lowest in the four studied countries; (5) the rate of labor distribution in the agricultural sector of Vietnam is high compared to Malaysia, Thailand, and the Philippines and in the opposite direction, the rate of labor in services of Vietnam is low compared to Malaysia, Thailand, and the Philippines; (6) labor productivity in all three sectors of Vietnam are lower than Malaysia, Thailand, and the Philippines but the most inefficient is agricultural sector, followed by the service and industrial.