Structural change, services sector and economic growth

In this study, we empirically analysed Clark Relationship, which defined as the share of services increases while economies get richer, in 1970-2014 period. Literature review for structural change is included in the first chapter. Second chapter contains the qualitative analysis of data set in the empirical analyses. In the last chapter, panel regression, VAR (Vector Autoregressive) and impulse-reponse analyses have been carried out for world-wide and Turkey. As a result of the analyses, it has been proven that the Clark Relationship is valid not only in the developed countries, but also in the developing countries, and therefore increasing the share of services is not always a development indicator. In addition, it's resulted that increase in services share / industry share ratio affecs the per capita GDP negatively. On the other hand, it has been determined that the structural change within the service sub-sectors has a cumulative positive effect on economic growth in Turkey for 1998Q2-2015Q2 period. Key Words: Structural Change, Clark Relationship, Services Sector, Economic Growth.