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The Industry oriented Asian Tigers and the Natural Resource based Pacific Alliance Economic Growth Models

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  • Briceño Avalos, Hernán Ricardo

Abstract

The aim of this thesis is provide “Pacific Alliance” of Latin America with a bundle of recommendations to make a successful economic integration with “Asian Pacific” region. It seems that following the Comparative Advantage theory developed by David Ricardo (1772-1823), under the incipient technological progress has damaged some developing economies, to such an extent that their specialization on exploiting and exporting raw materials are condemned them to live in a vicious circle. This is a compelling situation between getting high rents from natural resource exports, low investment in Research & Development to innovation, reaching also poor Human Development Indexes (“The Curse of Natural Resources”). On the other hand, there is a virtuous circle between manufacture exports by developing high-tech industries, high investment in Research & Development to innovate, reaching also high Human Development Indexes; such as Asian Tigers in the last decades (“Learning by Exporting”). These two central hypotheses have been testing under cross section econometric assessment, including more than one hundred countries for the three last decades (1981-2010). There are evidences to fulfilling both. The exports of Ores and Metals and other raw material oriented goods have negative impacts, while manufacture exports positive impact on the economic growth. Similarly, service exports have led the economic growth in the last decades due to Technology & Communication and International Commercial activities are increasing faster. They are significant and robust explanatory variables. Therefore, governments from raw material export oriented countries, like “Pacific Alliance”, should take into account Pragmatic Innovation Agenda and Technology Policies to get better sustainable living conditions. Otherwise, they will still suffering from the volatility of commodities demand and prices, low Research & Development investment, poor Human Development Index and social conflicts.

Suggested Citation

  • Briceño Avalos, Hernán Ricardo, 2013. "The Industry oriented Asian Tigers and the Natural Resource based Pacific Alliance Economic Growth Models," MPRA Paper 61665, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:61665
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    References listed on IDEAS

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    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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