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The impact of exports to China on Latin American growth

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  • Vianna, Andre C.

Abstract

This article analyzes the relationship between GDP growth in seven major Latin American countries and China’s demand for their exports. GLS panel estimation using annual data for the period 1994–2013 shows that the relationship was both statistically and economically significant. Control variables found to be significant in positively affecting GDP growth include the investment-to-output ratio, the exchange rate, and the terms of trade, and, in negatively affecting it, population growth and the unemployment rate. Consistent with recent literature, foreign direct investment was found not to be significant. A sharp drop in exports to China for many of the countries in the sample in 2015 raises questions about the region’s vulnerability to China’s growth slowdown.

Suggested Citation

  • Vianna, Andre C., 2016. "The impact of exports to China on Latin American growth," Journal of Asian Economics, Elsevier, vol. 47(C), pages 58-66.
    • Handle: RePEc:eee:asieco:v:47:y:2016:i:c:p:58-66
    DOI: 10.1016/j.asieco.2016.10.002
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    References listed on IDEAS

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    9. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634, August.
    10. Mr. Yongzhen Yu, 2011. "Identifying the Linkages between Major Mining Commodity Prices and China’s Economic Growth—Implications for Latin America," IMF Working Papers 2011/086, International Monetary Fund.
    11. Fang Cai & Yang Lu, 2013. "Population Change and Resulting Slowdown in Potential GDP Growth in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(2), pages 1-14, March.
    12. Ianchovichina, Elena & Thomas Hertel & Terrie Walmsley, 2014. "Understanding the Slowdown in Foreign Investment in China," GTAP Research Memoranda 4329, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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    Cited by:

    1. Hajamini, Mehdi & Falahi, Mohammad Ali, 2018. "Economic growth and government size in developed European countries: A panel threshold approach," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 1-13.
    2. Blagrave, Patrick & Vesperoni, Esteban, 2018. "The implications of China’s slowdown for international trade," Journal of Asian Economics, Elsevier, vol. 56(C), pages 36-47.
    3. Gitana Dudzeviciute & Agne Shimelyte & Jurate Antanaviciene, 2017. "Causal Nexus Between Export and Economic Growth in the European Union Countries," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 13(2), pages 107-120.
    4. Yue Lin, 2018. "Post-crisis China impact on trade integration and manufacturing competitiveness between Argentina and Brazil," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 16(2), pages 147-170, April.
    5. Robert C. Feenstra & Akira Sasahara, 2018. "The ‘China shock,’ exports and U.S. employment: A global input–output analysis," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 1053-1083, November.
    6. repec:mje:mjejnl:v:12:y:2017:i:2:p:107-120 is not listed on IDEAS
    7. Ivan Trofimov, 2021. "Income terms of trade and economic convergence: Evidence from Latin America," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 46(2), pages 41-67, June.
    8. Sasahara, Akira, 2019. "Explaining the employment effect of exports: Value-added content matters," Journal of the Japanese and International Economies, Elsevier, vol. 52(C), pages 1-21.
    9. Arteaga, Julio César & Cardozo, Mónica Liseth & Diniz, Márcia Jucá T., 2020. "Exports to China and economic growth in Latin America, unequal effects within the region," International Economics, Elsevier, vol. 164(C), pages 1-17.
    10. Trofimov, Ivan D., 2018. "Income terms of trade and economic convergence: Evidence from Latin America," MPRA Paper 87598, University Library of Munich, Germany.
    11. Gael Fokam, 2020. "Does Export to Japan Promote Economic Growth in Africa? A Panel Data Analysis," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(7), pages 509-514, July.
    12. Adriana Peluffo, 2020. "China US Trade War: Will it impact on Latin American Countries?," Documentos de Trabajo (working papers) 20-08, Instituto de Economía - IECON.
    13. Vianna, Andre C. & Mollick, Andre V., 2018. "Government size and openness: Evidence from the commodity boom in Latin America," Resources Policy, Elsevier, vol. 59(C), pages 318-328.

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    More about this item

    Keywords

    Trade policy; Export-led growth; Foreign direct investment; Exchange rate;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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