Determinants of service and manufacturing production and exports in Economies: a cross-country analysis

Abstract

With the increasing importance of the manufacturing and service sectors in the development of the emerging economies, with multiple such economies becoming manufacturing powerhouses, and economies like India becoming the hub for service exports, it is imperative to analyze the determinants that drive the increase in the manufacturing and service sector production and exports. To that effect, this paper analyses the impact of several institutional and economic variables on these two sectors, analysing the share of the production and exports in the GDP of a country. We find that the impact of education on the services sector is highly significant, and the institutions, hiring and firing practices, as well as the goods market efficiency are significant for the manufacturing production in the economy