Hostname: page-component-586b7cd67f-t7fkt Total loading time: 0 Render date: 2024-11-30T21:21:05.974Z Has data issue: false hasContentIssue false
  • English
  • Français

From Coffee Beans to Microchips: Export Diversification andEconomic Growth in Costa Rica

Published online by Cambridge University Press:  26 January 2015

Gustavo F.C. Ferreira  and
R. Wes Harrison
Gustavo F.C. Ferreira
Affiliation:
Department of Agricultural and Applied Economics, Virginia Tech, Blacksburg, Virginia
R. Wes Harrison
Affiliation:
Department of Agricultural Economics and Agribusiness, Louisiana State University Agricultural Center, Baton Rouge, Louisiana
Get access Rights & Permissions [Opens in a new window]

Abstract

In the wake of a severe economic crisis in the 1980s Costa Rica abandoned animport substitution model of development adopted in the 1960s andimplemented policies supporting foreign investment and the diversificationof its exports. This study presents an application of the model proposed byHerzer and Nowak-Lehnmann to test the hypothesis that export diversificationhas contributed to economic growth in Costa Rica via externalities oflearning-by-doing and learning-by-exporting over the period of 1965–2006.After using the autoregressive distributed lags and dynamic ordinary leastsquares models no long-run relationship was found between exportdiversification and growth.

Keywords

Central AmericaCosta Ricaexport diversificationeconomic growthtime seriesF14054
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 44 , Issue 4 , November 2012 , pp. 517 - 531
Copyright
Copyright © Southern Agricultural Economics Association 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Al-Marhubi, F. “Export Diversification and Growth: An Empirical Investigation.” Applied Economics Letters 7,9(2000):559–62.10.1080/13504850050059005Google Scholar
Balaguer, J., and Cantavella-Jordâ, M. “Structural Change in Exports and Economic Growth: Cointegration and Causality Analysis for Spain (1961–2000)” Applied Economics 36,5(2004):473–77.10.1080/00036840410001682179Google Scholar
Barquero, S.M. “Producers Earn Less than 10% of Sales Revenues from Coffee and Cantaloupes.” La Nacion (newspaper), Economics Section (2006).Google Scholar
Cattaneo, A., Hinojosa-Ojeda, R.A., and Robinson, S. “Costa Rica Trade Liberalization, Fiscal Imbalances, and Macroeconomic Policy: A Computable General Equilibrium Model.” The North American Journal of Economics and Finance 10,1(1999):39–67.10.1016/S1062-9408(99)00018-2Google Scholar
Engle, R.F., and Granger, C.W.J. “Cointegration and Error Correction: Representation, Estimation and Testing.” Econometrica: Journal of the Econometric Society 55,2(1987):251–76.10.2307/1913236Google Scholar
Feenstra, R., and Kee, H.L. “Export Variety and Country Productivity.” Working Paper 10830, National Bureau of Economic Research, Cambridge MA, 2004.Google Scholar
Fosu, K. “Export Composition and the Impact of Exports on Economic Growth of Developing Economies.” Economics Letters 34,1(1990):71–76.Google Scholar
Granger, C.W.J., and Newbold, P. “Spurious Regression in Econometrics.” Journal of Econometrics 2,3(1974):111–20.10.1016/0304-4076(74)90034-7Google Scholar
Greenaway, D., Morgan, W., and Wright, P. “Exports, Export Composition and Growth.” The Journal of International Trade & Economic Development 8,1(1999):41–51.10.1080/09638199900000004Google Scholar
Gutiérrez-de-Pineres, S.A., and Ferrantino, M. “Export Sector Dynamics and Domestic Growth: The Case of Colombia.” Review of Development Economics 3,3(1999):268–80.10.1111/1467-9361.00067Google Scholar
Gutiérrez-de-Pineres, S.A., and Ferrantino, M. Export Dynamics and Economic Growth in Latin America: A Comparative Perspective. Ashgate Publishing, the University of California, 2000.Google Scholar
Herzer, D., and Nowak-Lehnmann, D.F. “What Does Export Diversification do for Growth? An Econometric Analysis.” Applied Economics 38,15(2006):1825–38.10.1080/00036840500426983Google Scholar
Hesse, H. “Export Diversification and Economic Growth.” Working Paper No. 21. The International Bank for Reconstruction and Development/World Bank, Commission on Growth and Development, 2008.Google Scholar
Inder, B. “Estimating Long-Run Relationships in Economics: A Comparison of Different Approaches.” Journal of Econometrics 57,1-3(1993):53–68.10.1016/0304-4076(93)90058-DGoogle Scholar
Jansen, M. “Income Volatility in Small and Developing Economies: Export Concentration Matters.” Discussion Papers No 3. Geneva: World Trade Organization, 2004.Google Scholar
Johansen, S. “Statistical Analysis of Cointegration Vectors.” Journal of Economic Dynamics and Control 12,2-3(1988):231–54.10.1016/0165-1889(88)90041-3Google Scholar
Larrain, FB., Lopez-Calva, L.F., and Rodriguez-Clare, A. “Intel: A Case Study of Foreign Direct Investment in Central America.” Working Paper No. 58. Center for International Development, Harvard University, 2000.Google Scholar
Learner, E.E. The Heckscher-Ohlin Model in Theory and Practice. Princeton Studies in International Finance. 77. Princeton, NJ: Princeton University Press, 1995.Google Scholar
Levin, A., and Raut, L.K. “Complementarities between Exports and Human Capital in Economic Growth: Evidence from the Semi-industrialized Countries.” Economic Development and Cultural Change 46,1(1997):155–74.10.1086/452325Google Scholar
Love, J. “Commodity Concentration and Export Earnings Instability: A Shift from Cross-Section to Time Series Analysis.” Journal of Development Economics 24(1986):239–48.10.1016/0304-3878(86)90090-8Google Scholar
Matthee, M., and Naudé, W. “Export Diversity and Regional Growth: Empirical Evidence from South Africa.” Research Paper No. 2007/ 11. United Nations University, 2007.Google Scholar
Mesa-Lago, C., Arenas-de-Mesa, A., and Brenes, I. Market, Socialist, and Mixed Economies: Comparative Policy and Performance- Chile, Cuba, and Costa Rica. Baltimore, MD: Johns Hopkins University Press, 2003.Google Scholar
Mitchell, M.T., and Pentzer, S. Costa Rica: A Global Studies Handbook. Santa Barbara, CA: ABC-CLIO Inc., 2008.Google Scholar
Moreno-Brid, J.C., and Pérez, E. Trade Liberalization and Economic Growth in Central America. CEPAL Review 81. Santiago, Chile: The Economic Commission for Latin America (ECLA), 2003.Google Scholar
Perron, P., and Vogelsang, T. “Nonstationarity and Level Shifts with an Application to Purchasing Power Parity.” Journal of Business & Economic Statistics 10(1992):301–20.Google Scholar
Pesaran, M.H., and Shin, Y. “Chapter 11: An Autogressive Distributed Lag Modeling Approach to Cointegration Analysis.” Econometrics and Economic Theory in 20th Century: The Ragnar Frisch Centennial Symposium. Cambridge, MA. Cambridge University Press, 1995.Google Scholar
Pesaran, M.H., Shin, Y., and Smith, R.J. “Bounds Testing Approaches to the Analysis of Level Relationships.” Journal of Applied Econometrics 16,3(2001):289–326.10.1002/jae.616Google Scholar
Phillips, P.C.B., and Hansen, B.E. “Statistical Inference in Instrumental Variables Regression with I(1) Processes.” The Review of Economic Studies 57,1(1990):99–125.10.2307/2297545Google Scholar
Phillips, P.C., and Perron, P. “Testing for a Unit Root in Time Series Regression.” Biometrika 75,2(1988):335–46.10.1093/biomet/75.2.335Google Scholar
Promotora del Comercio Exterior de Costa Rica-Costa Rica. Estadisticas de Exportación. Internet site: http://www.procomer.com/est/mercados/libros.cfm/ (Accessed February 16, 2008).Google Scholar
Sanchez-Ancochea, D. “Development Trajectories and New Comparative Advantages: Costa Rica and the Dominican Republic.” World Development 34,6(2006):996–1015.10.1016/j.worlddev.2005.11.012Google Scholar
Stock, J.H., and Watson, M. “A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems.” Econometrica: Journal of the Econometric Society 61,4(1993):783–820.10.2307/2951763Google Scholar
Vos, R., Ganuza, E., Morley, S., and Robinson, S. Who Gains From Free Trade? Export-led Growth, Inequality and Poverty in Latin America. London, New York: Routledge, 2006.Google Scholar
World Bank. The Impact of Intel in Costa Rica: Nine Years after the Investment. Washington, DC: World Bank, 2006.Google Scholar
Zivot, E., and Andrews, D.W.K. “Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis.” Journal of Business & Economic Statistics 10,3(1992):251–70.Google Scholar