Disentangling services in developing regions: A test of Kaldor's first and second laws

The paper analyses the contribution of services vis-à-vis manufacturing as a driving force economic growth in developing regions. In doing so, we test Kaldor´s first and second laws for different service categories, providing comparative view across Asia, Latin America, Africa. work focuses attention on importance sector-level disaggregation exploring relationship between productivity growth. Hence, it accounts sector heterogeneity to help disentangle those specific branches that may fuel Panel data estimations are performed sample 32 countries during 1970–2010. Our findings support key role However, they also emphasise how market (particularly, business activities) enhance output ‘à la Kaldor’. research supports recent claims modernising industrial policy way promotes but is not limited manufacturing.