The Effect of Sectoral Division on GDP per Capita in the Slovak Republic

Abstract

The paper aims to analyse the sectoral division of the national economy in the Slovak Republic from various points of view. The authors examine the developmental changes in the number of people employed in different economic sectors (primary, secondary, tertiary, and quaternary) from 1948 to 2018 reflecting the natural development of the economy over that time. In order to do this, they have used a logical and comparative study of theoretical knowledge in accordance with the analysis of empirical data. The descriptive statistics are based on a sample of aggregate data about sectoral division in the Slovak Republic for the period 1948–2018. A cluster analysis on the data of sectoral division in all EU member states in 2010 and in 2017 was carried out in order to obtain a basic overview and opportunity to compare. The main focus of this paper is to examine the impact of sectoral division of the national economy on the Slovak Republic’s real GDP per capita. The research is based on panel regression as well as Granger causality tests on a sample of all 8 Slovak regions between 2001 and 2018. The results of the Granger causality tests show that causality runs one-way from all four sectors to real GDP per capita. Based on this, it is appropriate to carry out panel regression analysis. The results of this analysis suggest that all given sectors in period t−1 have had a significant impact on GDP per capita. In particular, the primary and secondary sectors have both had a relatively significant negative impact while the tertiary and quaternary sectors have had a positive one. It is interesting that the tertiary sector has had a greater positive impact than the quaternary one in the Slovak Republic.