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Trade liberalization and premature deindustrialization in Colombia

Author

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  • Mateo Hoyos López

    (Bogotá Council)

Abstract

This work analyzes the phenomenon of premature deindustrialization for Colombia and for other seven Latin American countries. Through a Koyck transformation model for the Colombian case, and a panel data fixed effects model for the complete sample of eight Latin American countries, this work documents that the fall in the average effective tariff in the region is the main economic explanation of the premature reduction in the manufacturing share. Also, it provides evidence that relates negative performance of manufacturing to foreign investment flows and to Dutch disease. On the other hand, taking into account the importance of manufacturing on productive sophistication and economic development, this work applies product space methodology in order to determine strategic manufacturing sectors for the establishment of a selective industrial policy for the Colombian case. As a result, the sectors that must be encouraged by the Colombian State are manufactured intermediate goods, mainly goods in the chemical industry.

Suggested Citation

  • Mateo Hoyos López, 2017. "Trade liberalization and premature deindustrialization in Colombia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-30, December.
    • Handle: RePEc:spr:jecstr:v:6:y:2017:i:1:d:10.1186_s40008-017-0095-6
    DOI: 10.1186/s40008-017-0095-6
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    References listed on IDEAS

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    Cited by:

    1. Itaman, Richard E. & Awopegba, Oluwafemi E., 2021. "Finance, oil rent and premature deindustrialisation in Nigeria," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 149-161.
    2. Dincer, Nergiz & Tekin-Koru, Ayca, 2019. "An Anatomy of Productivity in Turkey in the AKP Era through a Political Economy Lens," MPRA Paper 96844, University Library of Munich, Germany.
    3. John Bosco Nnyanzi & Susan Kavuma & John Sseruyange & Aisha Nanyiti, 2022. "The manufacturing output effects of infrastructure development, liberalization and governance: evidence from Sub-Saharan Africa," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 369-400, June.
    4. Halit Yanikkaya & Abdullah Altun & Pinar Tat, 2019. "Openness and Deindustrialization: A Turkish Case," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 33(2), pages 1-25.

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    More about this item

    Keywords

    Deindustrialization; Tariffs; Washington Consensus; Industrial policy; Structural transformation; Colombia; Latin America;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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