The distribution sector and the development process: Are there patterns? Yes

Using air increasing returns specification for distribution, air inverted U pattern between the share of distribution in gross domestic product and the level of development is shown to arise. A cross-section time-series data set is constructed and merged with one used to analyze the service sector In contrast to the rising pattern found for services, an average time-series relation that exhibits air inverted U pattern is established. The empirical results are robust, for example, to choice of functional form and country and time period coverage. A similar pattern is found in the average cross-section (country) relation between distribution and development.