From Coffee Beans to Microchips: Export Diversification and Economic Growth in Costa Rica
During the early 1980s Costa Rica experienced its worst economic crisis since World War II, which led to the abandonment of the import substitution model of development adopted in the 1960s. This severe economic downturn also spurred the implementation of a series of new policies supporting foreign investment in high-value-added industries and the diversification of the nation’s exports. As a result, Costa Rica has diversified its economic activity, moved away from its historical dependence on agricultural exports, and gained new competitive advantages in the manufacturing sector. This study presents a straightforward generalization of the model proposed by Herzer and Nowak-Lehnmann’s (2006) to test the hypothesis that export diversification has influenced economic growth in Costa Rica via externalities of learning-by-exporting and learning-by-doing. To examine whether a long-run relationship exists between export diversification and economic growth, two types of statistical methodologies are used: the bounds test to cointegration within a distributed lag (ARDL) framework and the dynamic OLS (DOLS). Overall results sufficiently conclude that, at least in the Granger’s sense, there is no long-run causality between export diversification and economic growth in Costa Rica over the period of 1965 to 2006.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.saea.org/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sanchez-Ancochea, Diego, 2006. "Development trajectories and new comparative advantages: Costa Rica and the Dominican Republic under Globalization," World Development, Elsevier, vol. 34(6), pages 996-1015, June.
- David Greenaway & Wyn Morgan & Peter Wright, 1999. "Exports, export composition and growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(1), pages 41-51.
- Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems,"
Econometric Society, vol. 61(4), pages 783-820, July.
- Tom Doan, . "SWDOLS: RATS procedure to estimate cointegrating vectors using dynamic OLS," Statistical Software Components RTS00207, Boston College Department of Economics.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Perron, Pierre & Vogelsang, Timothy J, 1992.
"Nonstationarity and Level Shifts with an Application to Purchasing Power Parity,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 10(3), pages 301-20, July.
- Vogelsang, T.I. & Perron, P., 1991. "Nonstationary and Level Shifts With An Application To Purchasing Power Parity," Papers 359, Princeton, Department of Economics - Econometric Research Program.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- Matthee, Marianne & Naude, Wim, 2007. "Export Diversity and Regional Growth: Empirical Evidence from South Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Inder, Brett, 1993. "Estimating long-run relationships in economics : A comparison of different approaches," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 53-68.
- Amin Gutierrez de Pineres, Sheila & Ferrantino, Michael, 1999. "Export Sector Dynamics and Domestic Growth: The Case of Colombia," Review of Development Economics, Wiley Blackwell, vol. 3(3), pages 268-80, October.
- Robert C. Feenstra & Hiau Looi Kee, 2004.
"Export Variety and Country Productivity,"
NBER Working Papers
10830, National Bureau of Economic Research, Inc.
- Jacint Balaguer & Manuel Cantavella-Jordá, 2002.
"Structural Change In Exports And Economic Growth: Cointegration And Causality Analysis For Spain (1961-2000),"
Working Papers. Serie EC
2002-22, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Jacint Balaguer & Manuel Cantavella-Jorda, 2004. "Structural change in exports and economic growth: cointegration and causality analysis for Spain (1961-2000)," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 473-477.
- Fahim Al-Marhubi, 2000. "Export diversification and growth: an empirical investigation," Applied Economics Letters, Taylor & Francis Journals, vol. 7(9), pages 559-562.
- Zivot, Eric & Andrews, Donald W K, 2002.
"Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 20(1), pages 25-44, January.
- Zivot, Eric & Andrews, Donald W K, 1992. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 251-70, July.
- Eric Zivot & Donald W.K. Andrews, 1990. "Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Cowles Foundation Discussion Papers 944, Cowles Foundation for Research in Economics, Yale University.
- Fosu, Augustin Kwasi, 1990. "Export composition and the impact of exports on economic growth of developing economies," Economics Letters, Elsevier, vol. 34(1), pages 67-71, September.
- Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
- Dierk Herzer & Nowak-Lehnmann Felicitas, 2006. "What does export diversification do for growth? An econometric analysis," Applied Economics, Taylor & Francis Journals, vol. 38(15), pages 1825-1838.
- M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
- Cattaneo, Andrea & Ojeda, Raul A. Hinojosa- & Robinson, Sherman, 1999. "Costa Rica trade liberalization, fiscal imbalances, and macroeconomic policy: a computable general equilibrium model," The North American Journal of Economics and Finance, Elsevier, vol. 10(1), pages 39-67.
- Levin, Andrew & Raut, Lakshmi K, 1997. "Complementarities between Exports and Human Capital in Economic Growth: Evidence from the Semi-industrialized Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 46(1), pages 155-74, October.
When requesting a correction, please mention this item's handle: RePEc:ags:saeana:47178. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.