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Stages of diversification in Latin America

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  • Don P. Clark
  • W. Charles Sawyer

Abstract

This article investigates the relationship between sectoral concentration and per capita income over the period 1963 to 2009 for 17 Latin American countries. Results confirm the existence of a U-shaped relationship between sectoral concentration of manufacturing value added and the level of per capita income. Import substitution industrialization policies encouraged excessive sectoral diversification early in the development process. Re-specialization in comparative advantage activities by higher per capita income countries coincided with a shift towards more market-oriented policies. The 'Lost Decade' of macroeconomic turmoil did not disrupt the evolving pattern of sectoral concentration.

Suggested Citation

  • Don P. Clark & W. Charles Sawyer, 2014. "Stages of diversification in Latin America," Applied Economics Letters, Taylor & Francis Journals, vol. 21(13), pages 893-897, September.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:13:p:893-897
    DOI: 10.1080/13504851.2014.896975
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    References listed on IDEAS

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    1. Roberto Samaniego, 2013. "Stages of Diversification and Industry Productivity Differences," 2013 Meeting Papers 774, Society for Economic Dynamics.
    2. Miklós Koren & Silvana Tenreyro, 2007. "Volatility and Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(1), pages 243-287.
    3. Mr. Sebastian Sosa & Ms. Evridiki Tsounta & Miss Marie S Kim, 2013. "Is the Growth Momentum in Latin America Sustainable?," IMF Working Papers 2013/109, International Monetary Fund.
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    Cited by:

    1. Clark, Don P. & Lima, Luiz Renato & Sawyer, W. Charles, 2016. "Stages of diversification in Africa," Economics Letters, Elsevier, vol. 144(C), pages 68-70.
    2. Diego Andrés Peñaranda Molina, 2021. "Determinantes de la diversificación de exportaciones en Sudamérica: un análisis con datos de panel," Documentos de trabajo 3/2021, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.

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