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Trade Liberalization and Productivity Growth in Latin American Manufacturing, 1970-98

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  • Eva Paus
  • Nola Reinhardt
  • Michael Robinson

Abstract

We examine the relationship between trade liberalization and manufacturing labor productivity growth for 27 industries in seven Latin American countries from 1970 to 1998. Our trade variables are export and import growth and a commercial reform index, which capture the various channels through which productivity and trade liberalization may be related. Using the Arellano-Bond GMM estimator, we find a significant positive correlation between all three variables and productivity growth. US productivity growth and distance behind best-practice technology are also significantly correlated with productivity growth. These results have to be understood in the context of sweeping economic reforms and continuing economic difficulties in the countries under investigation.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 6 (2003)
Issue (Month): 1 ()
Pages: 1-15

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Handle: RePEc:taf:jpolrf:v:6:y:2003:i:1:p:1-15

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Keywords: Latin American Manufacturing; Productivity Growth; Trade Liberalization;

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References

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  1. Chuang, Yih-Chyi, 1998. "Learning by Doing, the Technology Gap, and Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 697-721, August.
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  8. Tybout, James, 1998. "Manufacuring firms in developing countries - how well do they do, and why?," Policy Research Working Paper Series 1965, The World Bank.
  9. Bonelli, Regis, 1992. "Growth and productivity in Brazilian industries : Impacts of trade orientation," Journal of Development Economics, Elsevier, vol. 39(1), pages 85-109, July.
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  11. Macario, Carla, 2000. "The Behavior of Manufacturing Firms Under the New Economic Model," World Development, Elsevier, vol. 28(9), pages 1597-1610, September.
  12. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning By Exporting Important? Micro-Dynamic Evidence From Colombia, Mexico, And Morocco," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 903-947, August.
  13. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 245-276.
  14. Nishimizu, Mieko & Robinson, Sherman, 1984. "Trade policies and productivity change in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 16(1-2), pages 177-206.
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  16. Mortimore, Michael, 2000. "Corporate Strategies for FDI in the Context of Latin America's New Economic Model," World Development, Elsevier, vol. 28(9), pages 1611-1626, September.
  17. Alcorta, Ludovico, 2000. "New Economic Policies and the Diffusion of Machine Tools in Latin America," World Development, Elsevier, vol. 28(9), pages 1657-1672, September.
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Citations

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Cited by:
  1. Trevino, Len J. & Thomas, Douglas E. & Cullen, John, 2008. "The three pillars of institutional theory and FDI in Latin America: An institutionalization process," International Business Review, Elsevier, vol. 17(1), pages 118-133, February.
  2. Ebenstein, Avraham & Harrison, Ann & McMillan, Margaret & Phillips, Shannon, 2011. "Estimating the impact of trade and offshoring on American workers using the current population surveys," Policy Research Working Paper Series 5750, The World Bank.
  3. Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
  4. Paus, Eva A., 2004. "Productivity Growth in Latin America: The Limits of Neoliberal Reforms," World Development, Elsevier, vol. 32(3), pages 427-445, March.
  5. Fethi AMRI & Rim MOUELHI, 2013. "Productivity Growth And Competition In Tunisian Manufacturing Firms," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 37-64.
  6. Rajagopal, 2005. "Where Did the Trade Liberalization Drive Latin American Economy: A Cross Section Analysis," Econometrics 0504003, EconWPA.
  7. Alessia LO TURCO & Daniela MAGGIONI, 2012. "Does trade foster employment growth in emerging markets? Evidence from Turkey," Working Papers 383, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  8. Faundez, Sebastian & Mulder, Nanno & Carpentier, Nicole, 2011. "Productivity growth in Latin American manufacturing: what role for international trade intensities?," MPRA Paper 36507, University Library of Munich, Germany.
  9. Rim BEN AYED MOUELHI, 2007. "The Impact Of Trade Liberalization On Tunisian Manufacturing: Structure, Performance And Employment," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 25, pages 87-114.
  10. Carlos Gustavo Machicado & Felix Rioja & Antonio Saravia, 2012. "Productivity, Structural Change, and Latin American Development," Development Research Working Paper Series 03/2012, Institute for Advanced Development Studies.

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