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South-South regional integration and industrial growth : the case of the Andean Pact

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  • Madani, Dorsati H.
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    Abstract

    Has the revival of the Andean Pact affected the industrial growth of Bolivia, Colombia, and Ecuador? Has this regional agreement had greater effects tha unilateral liberalization? The author explores two potential channels for industrial growth: scale effects and variety of imported intermediate inputs. She analyzes data from 2 countries (classified at the three-digit level of ISIC) across three countries. The results show that: 10 The variety of intermediate inputs originating from nonregional partners has a significant positive impact on growth in a handful of industries. 2) The effect of regional variety is at best mixed. This lends preliminary support to the argument that unilateral liberalization will have a positive impact on output growth through the channel of imported intermediate inputs. There is significant homogeneity in industry-level returns to scale. Moreover, in the three Andean countries studied, cross-country scale effects were small and negative. Therefore, the three countries should not expect large or across-the-board gains through scale effects from their regional arrangement.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2614.

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    Date of creation: 30 Jun 2001
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    Handle: RePEc:wbk:wbrwps:2614

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    Keywords: Health Monitoring&Evaluation; Environmental Economics&Policies; Economic Theory&Research; Public Health Promotion; Water and Industry; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies; Economic Theory&Research; Health Monitoring&Evaluation; Water and Industry;

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    1. Henrekson, Magnus & Torstensson, Johan & Torstensson, Rasha, 1995. "Growth Effects of European Integration," Working Paper Series 439, Research Institute of Industrial Economics.
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    Cited by:
    1. Carlos Esteban Posada & Edgar Trujillo, . "Los Precios y el Impacto de la Industria en el Crecimiento Económico: Los Casos Inglés (1770-1840) y Colombiano (1923-1998)," Borradores de Economia 312, Banco de la Republica de Colombia.
    2. Madani, Dorsati H., 2001. "Regional integration and industrial growth among developing countries - the case of three ASEAN members," Policy Research Working Paper Series 2697, The World Bank.

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