The Role of Market Services in the Polish Economy
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Publication date: 2015-04-30
GNPJE 2015;276(2):163-193
The study aims to either validate or disprove the hypothesis that market services, alongside industry, played a key role in spurring the development of the Polish economy in 1995-2012. The authors conduct a multifaceted empirical analysis that addresses a range of research questions related to the role of structural change and variations in relative prices in economic growth. The article also examines the behavior of industry and services during a business cycle and the internal differentiation of market services. The results of the authors’ macroeconomic analyses are based on national accounts data from 1995-2012. The article scrutinizes differences across service sectors in terms of the levels and dynamics of labor productivity and employment, based on firm-level data from 2005-2012. The authors find that the role of market services in employment in Poland steadily increased in 1995-2012. At the same time, due to technological change, industry enjoyed stronger growth in labor productivity and total factor productivity (TFP). The prices of manufactured goods steadily fell compared with services. However, the cyclical variability of employment and value added was clearly lower in market services. Due to substantial heterogeneity across firms within the considered categories, the authors say they were “unable to identify significantly higher dynamics of exports-intensive, capital-intensive, business-to-business (B2B) or knowledge-based services.” On the basis of their research, the authors predict that, due to the increasing role of market services, Poland’s economic growth will be slower but more stable in the future.
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