Productivity growth and international openness : evidence from Latin American countries 1980-2006

Abstract

In this study we examine productivity growth and their relationship with international openness in Latin American countries over the period 1980¿2006. Overall results on productivity indicate a stagnation process for the entire period 1986¿2006. The decomposition of productivity into catching up and technical change reveals that the first have a stagnation process and the latter worsening. Analyzing the relationship between productivity growth and international openness we find different patterns for both methodologies parametric (Arellano¿Bond estimator) and nonparametric (GAM) and for both measures of international openness merchandise trade (% of GDP) and (export+imports)/GDP. In particular in a parametric way, although the shape is curvilinear for both models the relationship is positive inverted U¿shaped in the first case and Ushaped in second.