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Toward economic diversification in Trinidad and Tobago

Author

Listed:
  • Longmore, Rohan
  • Jaupart, Pascal
  • Cazorla, Marta Riveira

Abstract

This paper contributes to the predominant diversification debate that has been ongoing in Trinidad and Tobago for more than three decades. The paper makes a determination of the key impediments to the country's attempts at diversification. Econometric techniques are applied on panel data to identify the most significant obstacles to economic diversification for a set of 183 countries. The results indicate that openness to foreign direct investment inflows is the most fundamental driver of diversification. The findings are then applied to the specific case of Trinidad and Tobago through a detailed analysis of the links in the trends followed by foreign direct investment and diversification between 1980 and 2011. Greater openness to foreign direct investment and improving the business climate appear to be key policies the twin-island republic could implement further in order to expand the range of activities of its economic structure.

Suggested Citation

  • Longmore, Rohan & Jaupart, Pascal & Cazorla, Marta Riveira, 2014. "Toward economic diversification in Trinidad and Tobago," Policy Research Working Paper Series 6840, The World Bank.
    • Handle: RePEc:wbk:wbrwps:6840
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    References listed on IDEAS

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    1. Christopher F Baum, 2006. "An Introduction to Modern Econometrics using Stata," Stata Press books, StataCorp LP, number imeus, March.
    2. KPODAR Kangni, 2005. "Manuel d'initiation à Stata (Version 8)," Computer Programs 0501107, University Library of Munich, Germany.
    3. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 291-307, June.
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    Cited by:

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    2. Daniel Lederman & Samuel Pienknagura & Diego Rojas, 2021. "Latent Trade Diversification and Its Relevance for Macroeconomic Stability," The World Bank Economic Review, World Bank, vol. 35(1), pages 58-91.
    3. Keston K. Perry, 2018. "The Dynamics of Industrial Development in a Resource-Rich Developing Society: A Political Economy Analysis," Journal of Developing Societies, , vol. 34(3), pages 264-296, September.
    4. Hallonsten, Jan Simon & Ziesemer, Thomas, 2016. "A semi-endogenous growth model for developing countries with public factors, imported capital goods, and limited export demand," MERIT Working Papers 2016-004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    Keywords

    Economic Theory&Research; Emerging Markets; Access to Finance; Debt Markets; Currencies and Exchange Rates;
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