Analysis of recent evolution of economic sectoral output, employment and structural economic transformation in EAC : Spatial panel data approach (1991-2018)


This paper examines the effect of a variate of drivers of economic growth in East African Community (EAC) countries from 1991 to 2018. Different researches have been criticizing the reallocation of economic activities in different sectors of the economy in the southern hemisphere, especially in sub-African countries. This paper is devoted to the recent evolution of the sectoral output level and employment in East African Community countries, assessment of causes and covariates that are correlated, and which might help us to predict output across countries and over time in EAC. We have modeled sectoral output in EAC using the spatial panel approach. We have empirically illustrated spatial Durbin model using the space-time data for output (GDP per capita), sectoral employment share, labor force and final consumption expenditure over 28 years from 1991-2018, where the motivation for spatial dependence is a bootlegging effect (see Debarsy et al., 2010) where buyers either of agricultural products, manufactured products, and different services near country borders purchase in neighboring country if there is a price advantage to doing so.

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