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Creating New Opportunities for Rural Producers. Impact Evaluation of a Pilot Program in Colombia

Author

Listed:
  • Sandra Rozo

    () (Deaprtment of Economics, University of California Los Angeles, Los Angeles, USA)

  • Yuri Suarez Dillon Soares

    () (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA)

  • Veronica Gonzalez Diez

    () (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA)

  • Carlos Morales

    () (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA)

Abstract

Industrial clusters are commonly targeted to receive financial support allocated to local-based development projects. Cluster promotion is seen as an effective industrial policy tool aimed at improving productivity and employment generation. Nevertheless, despite its popularity as a regional development policy, identifying and assessing the economic performance of clusters is still a challenge for policy makers. The objective of this paper is twofold: identify the location of clusters in Brazil; and provide some insights of its effect on employment generation. This paper uses three measures of identification to test whether the correlation between clusters and economic performance depends on the way clusters are identified. Noticeably, the existing literature on clusters’ identification in Brazil ignores possible spatial dependence. To address this gap in the literature, this paper draws on Carroll et al. (2008) and uses Location Quotient (LQ) and Local Indicator of Spatial Association (LISA) simultaneously to identify potential clusters in Brazil in 27 industrial sectors and using a comprehensive census data of the formal sector covering 5564 Brazilian municipalities. In addition, the paper uses an annual municipal panel data for the period 2006-2009 to assess whether the presence of clusters is correlated to superior economic performance, particularly employment generation. The results show that potential clusters are correlated with better economic performance, however, different types of agglomerations present different association with economic performance. Firstly, municipalities in specialized clusters (SR) perform poorly in terms of employment generation. Secondly, the results suggest that clusters of municipalities with neighbors with similar industrial structure (Periphery Regions and Potential Cluster Region) perform much better than those that only present industry specialization (SR) and are not close to similar municipalities.

Suggested Citation

  • Sandra Rozo & Yuri Suarez Dillon Soares & Veronica Gonzalez Diez & Carlos Morales, 2013. "Creating New Opportunities for Rural Producers. Impact Evaluation of a Pilot Program in Colombia," OVE Working Papers 0113, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
  • Handle: RePEc:idb:ovewps:0113
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    References listed on IDEAS

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    More about this item

    Keywords

    Drug Production; Productivity; Latin America;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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