Dynamic Structural Changes in Economic Growth Determinants, Industry Change and Economic Transformation

Abstract

This study investigates the transformation in economic growth based on the unified growth theory, using a sample ofcross-sectional data over the period 2003-2018. The results show that physical capital, labor, and human capital ofsample country have significant effects on economic growth measured by per capita gross domestic product,especially the impact on the growth of industrial industries; however, their contribution to economic growth haschanged over time. Human capital has become the primary driving force in economic growth, the effect of physicalcapital cannot be ignored, and the role of labor has taken a back seat. The growth rate of total factor productivityimproves economic growth, but its effect on growth has weakened since 2009, suggesting that the sample country istransforming from a post-Malthusian growth stage to a modern economic growth stage. Policy implications of thefindings are discussed.