SECTORAL ANALYSIS: GROWTH ACCOUNTING OF TERTIARY INDUSTRIES

Abstract

The tertiary sector is one of the modern styles of economic systems in view of the share it occupies in the field of production as well as employment occupied share. Hence, just like other lands, the UAE, witnessed an economic structural change similar to developed and developing nations, where the tertiary industries contributed 55.4% in 2015 to total country’s income. The empirical study aimed to analyze the contribution portion of growth in the tertiary industries through using the growth accounting framework in time-series from 1990 to 2015. The empirical study found that most of the industries contributed significantly to the growth of the tertiary sector. The contribution shares of growth due to labor and capital varied among industries. The main observed results show that there was a vice versa relationship between TFP performance and the size of labor, where the TFP positively corresponded with the decline in the size of labor specifically from 2010-2015.

Keywords

• Growth accounting
• Tertiary sector
• Economic industries
• TFP
• UAE