Trade Reforms and Manufacturing Industry in Chile
AbstractThe Chilean economy underwent a deep structural change in the mid-seventies, through several economic reforms. Among these, the most impressive one was trade liberalization. This process caused a string of bankruptcies in the manufacturing industry and a reduction in the share of this sector in GDP, which some authors have used to imply that Chile has become a less industrialized economy. This paper describes the main policy changes that are relevant to understand the evolution of the manufacturing industry in Chile after the reforms, and analyzes the evolution of productivity using plant-level data. Our findings challenge the hypothesis that trade liberalization stifled the manufacturing sector and pushed the economy toward exporting raw materials. Also, our results show that the Chilean industry, after these economic reforms, became more efficient and competitive.
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Bibliographic InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 210.
Date of creation: May 2003
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-LAM-2004-09-12 (Central & South America)
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