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Structural Transformation and the role of Foreign Direct Investment in Portugal: a descriptive analysis for the period 1990-2005

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  • Miguel Lebre de Freitas

    ()
    (Universidade de Aveiro, NIPE, GEE)

  • Ricardo Paes Mamede

    (ISCTE, GEE, Dinâmia)

Abstract

In this paper we use a recent measure of the “income level of a country’s exports” proposed by Hausmann et al. (2007) to characterize the structure of the Portuguese export basket, its recent evolution and the role of FDI in this process. We find that between 1990 and 2005 the improvement in the income content of the Portuguese export basket was achieved through a positive “structural transformation effect” that more than offset the negative effect of having a significant share of products exposed to an increasing competition from emerging economies. We find that the weight of exports with “high” and “very high” income content increased considerably in this period, with these two classes explaining more than half of the total export growth. Analysing the presence of FDI in the different export products, we find a higher than average share of foreign affiliated firms in products with “High” and “Very High” income content. These and other pieces of evidence suggest that FDI has played a relevant role both in the growth of Portuguese exports and in the increase of their income content.

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File URL: http://www.gee.min-economia.pt/RePEc/WorkingPapers/MLF-RPM.pdf
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Bibliographic Info

Paper provided by Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação in its series GEE Papers with number 0009.

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Length: 35 pages
Date of creation: Dec 2008
Date of revision: Dec 2008
Handle: RePEc:mde:wpaper:0009

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Keywords: International trade; Foreign Direct Investment; The Portuguese Economy; Structural transformation;

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