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Determinants of Service Sector Growth in Botswana
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This study examines the factors affecting service sector growth and development in Botswana. Using annual time series data from 1980 to 2015, the study employs the auto regressive distributed lag (ARDL) estimation technique to identify the factors that co

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Date
  12th June 2018

Author
 Mpho Raboloko

Keywords
  Service Sector, Co-integration, Error Correction Model, ARDL

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This study examines the factors affecting service sector growth and development in Botswana. Using annual time series data from 1980 to 2015, the study employs the auto regressive distributed lag (ARDL) estimation technique to identify the factors that contribute to service sector growth. The results show that gross national expenditure, domestic credit to the private sector and gross fixed capital formation contribute positively to the growth of the service sector in Botswana. However, trade openness is found to negatively impact the growth of service sector in the country. The policy implication of the results is that in formulating service oriented policies, government should focus on factors that augment the growth of services sector. Specifically, government should
increase spending on the service sector and its sub-sectors. Also, the banking sector should avail credit to the private sector as this is essential for the growth and development of the service sector.


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