Decomposition of economic growth in Bulgaria by industry

Purpose – The aim of this paper is to present a methodology for the decomposition of economic growth by industry which allows interindustry comparisons. Design/methodology/approach – The paper uses the growth decomposition methodology developed by Ivanov and Ivanov and Webster for tourism and generalizes it for all industries in the national economy. Findings – The methodology is exemplified with analysis of the contribution of specific industries to economic growth in Bulgaria for the period 2000-2005. However, the model presents an approach that is general and can be applied to other countries and industries. Research limitations/implications – The methodology identifies the direct impacts of specific industries on the per capita growth of real gross domestic product/gross value added. Future research might integrate indirect and induced effects in the analysis. The methodology could be further refined by decomposing the gross domestic product/gross value added to their constituent elements. Practical implications – The paper identifies the industries in the Bulgarian economy that generate economic growth. Originality/value – The paper introduces a new methodology for measuring the contribution of specific industries to economic growth. It might be of value to both academics and macroeconomic policy makers.