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Structural Transformation and the role of Foreign Direct Investment in Portugal: a descriptive analysis for the period 1990-2005

Author

Listed:
  • Miguel Lebre de Freitas

    (Universidade de Aveiro, NIPE, GEE)

  • Ricardo Paes Mamede

    (ISCTE, GEE, Dinâmia)

Abstract

In this paper we use a recent measure of the “income level of a country’s exports” proposed by Hausmann et al. (2007) to characterize the structure of the Portuguese export basket, its recent evolution and the role of FDI in this process. We find that between 1990 and 2005 the improvement in the income content of the Portuguese export basket was achieved through a positive “structural transformation effect” that more than offset the negative effect of having a significant share of products exposed to an increasing competition from emerging economies. We find that the weight of exports with “high” and “very high” income content increased considerably in this period, with these two classes explaining more than half of the total export growth. Analysing the presence of FDI in the different export products, we find a higher than average share of foreign affiliated firms in products with “High” and “Very High” income content. These and other pieces of evidence suggest that FDI has played a relevant role both in the growth of Portuguese exports and in the increase of their income content.

Suggested Citation

  • Miguel Lebre de Freitas & Ricardo Paes Mamede, 2008. "Structural Transformation and the role of Foreign Direct Investment in Portugal: a descriptive analysis for the period 1990-2005," GEE Papers 0009, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Dec 2008.
    • Handle: RePEc:mde:wpaper:0009
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    File URL: https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_9.pdf
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    References listed on IDEAS

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    2. Susana SALVADO & Miguel LEBRE DE FREITAS, 2008. "Industry Similarities, Comparative Advantage and Upscale Opportunities for Portugal in the Process of Structural Transformation: an Empirical Assessment Based on 2005 Trade Data," EcoMod2008 23800122, EcoMod.

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    More about this item

    Keywords

    International trade; Foreign Direct Investment; The Portuguese Economy; Structural transformation;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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