Giovanni
E. Reyes [1]
(University of PittsburghGraduate School of Public and International Affairs)
1.
Introduction
The research problem to be addressed here is concerning the degree at which, Latin
American countries have established their international links in terms of exports, and how
these exports have influenced economic growth. Exports
are studied as international links and variables of the current phenomenon of
globalization. The period under study is from
1960 to 1995. Complete data from 1996 to 2000
is not available at the moment of publishing this article, and in addition, this last
mentioned period had the impact of the international financial crisis originated in the
Southeast Asia in the summer of 1997 and the effect of extraordinary high prices in oil
during 1999 and 2000. These events can give
to the relationship of exports and economic growth an "abnormal" repercussion.
One of the main assumptions of globalization is its fundamental feature of
integration. In economic terms, this
statement will imply, for the purposes of this paper, the basic hypothesis: Latin American
economies have become more integrated with their main trade partners in the international
economic field; and this integration has had a positive effect on economic growth. In this regard it is important to keep in mind
that, Latin American nations are trying to achieve through the export leading policies,
their main macroeconomic goals: a) price
stability; b) economic growth; c) low levels of unemployment; and d) positive levels in
the balance of trade.
In reference to research statements, this article will deal with the following
assertion: exports from Latin American countries during the period 1960-1995 have been the
main cause for the economic growth of these nations.
This paper has three level of analysis: (a)
Latin America as a whole region; (b) Latin American countries grouped in terms of size of
economies, structure of exports, regions and positions; and (c) Latin American countries
from an individual perspective.
2.
Basic model and indicators
The fundamental assumption here is that with an increasing role in the export
sector, economic growth increases within economies of Latin American nations. Some studies tended to demonstrate that
developing countries with a high level of exports can achieve better standards in terms of
economic growth (Feder 1982; Balassa 1991; Yarbrough 1994).
In addition, it has been claimed that the role of exports has several other
beneficial impacts other than economic growth alone.
A brief summary of the “trade optimist” arguments indicate that trade
liberalization[2]
generates rapid export and economic growth mainly because it: (a) promotes competition, improved resource
allocation, and economies of scale in areas where less developed countries -LDCs- have a
comparative advantage, consequently costs of production are lowered; (b) generates
pressures for increased efficiencies, product improvement, and technical change, thus
raising factor productivity and further lowering costs of production; (c) accelerates
overall economic growth, which raises profits and promotes greater saving and investment
and thus furthers growth; and (d) attracts foreign capital and expertise, which are in
scarce supply in LDCs.[3] On the other hand, “trade pessimist”
arguments focus their attention on three major elements:
(a) limited growth of world demand for primary exports; (b) secular
deterioration in the terms of trade for primary producing nations; and (c) rise of the
“new protectionism” against the exports of LDC manufactured and agricultural
goods. They declare that LDC exports grow
slowly because of four main factors.
Those factors are: (a) a shift in developed countries from low technology,
material-intensive goods to high-technology, skill-intensive products, which decreases the
demand for Third World raw materials; (b) increased efficiency in industrial uses of raw
materials and the substitution of synthetics for natural raw materials like rubber and
cotton; (c) low income elasticity of demand for primary products and simple manufactured
goods; (d) the rising productivity of agriculture in developed countries and their
increasing protectionism for agriculture and labor-intensive developed-country industries.[4]
Empirical evidence to evaluate the pessimistic and optimistic approaches in
relation to trade show that when the world economy is expanding rapidly -this was the case
during the years 1960 to 1973- the more open LDCs appear to perform better in both
aggregate exports and economic growth than closed-economy nations. However, when the world economy slowed down
-particularly during the period 1973 to 1977- the more open economies of LDCs with the
exception of the new industrialized countries in Southeast Asia, had a more difficult time
in exports and economic growth.[5] Singer and Gray argue that when world economic
conditions were more unfavorable, such as the case for the period 1977 to 1983, high
growth rates of export earning occur only when external demand is strong.[6]
In any case, a model studied by Gershon Feder was the essential base in obtaining
the results of this paper.[7] This model had three stages in its development. The first one is the classical approach, according
to which economic growth is a result of the interaction of two economic elements: capital and labor.[8] The second stage includes exports and the openness
of economies in addition to the capital and labor factors.[9] Finally, the third stage includes all the
above mentioned elements plus the set of dummy variables this study is adding: (a) structure
of exports -oil, manufacturing, and agriculture/mining;
(b) Latin American regions -Mexico/Central America/Caribbean, Andean, and Southern
Cone; (c) positions -semiperiphery and
periphery countries; and (d) size of economies -large economies, medium, and small ones. As it was mentioned above, in addition to this
groups of countries, this paper will study the Feder’s model on Latin American region
as a whole, and to the individual countries.
All elements from this multiple regressional model will be studied during four
periods of time 1960-73; 1974-82; 1983-90; and 1991-95.
During each one of these periods Latin American countries faced different
international economic conditions. A summary
of these international circumstances is presented in Table No.1.
Regarding the groups of Latin American countries, the dummy variables were studied
in two different ways. First they were
considered alone within the macroeconomic model. Second,
all dummy variables were seen as a complete set to establish a more integrated interaction
of them and thus arriving at more representative results.
Specific countries which formed different classifications regarding dummy variables
are presented in each table as a reference. The
model used to establish whether or not exports were significant elements behind economic
growth in Latin America is:[10]
aGNP = a (aL) + b (aI) + c ((aXrg) * (X/GNP)) + Svdv
Where:
aGNP
=
rate of annual growth of gross
national product
aL
=
rate of annual growth of labor force
aI
=
rate of annual growth of investments
aXrg
=
rate of annual growth of exports
X/GNP
=
the percent of export over the gross national product
Svdv =
specific variables presented as dummy variables.
Table 1
Multiple Regression Analysis:
General Characterization of the Four Periods
of Time Under Study
Sub period |
Latin American Economic Characteristics |
International Scenario |
||
|
Economic Growth |
Inflation |
Other |
|
1960/73 |
moderate and high |
low |
- Agricultural exports - Beginning of intra-regional
trade agreements |
- Breton Woods institutions - Stability in the international
trade and financial systems - Beginning of flexible exchange
rates models (1973) - No more US$/gold standard
(1971) |
1974/82 |
moderate and high |
low |
- Generation of external debt |
- Increases in oil prices (1973, 1979) - High international bank
liquidity |
1983/90 |
low |
high |
- Economic adjustment plans - More flexible exchange rates
models - Promotion of export leading
policies |
- Increase in the US interest
rate - Strong US dollar until 1985 - From 1985 less strong US dollar - Reductions of financial loans
to Latin America |
1991/95 |
moderate and high |
low |
- Economic adjustment plans - Promotion of exports - Reinforcement of intrarregional
trade agreements |
- Return of capital flows to
Latin America - From 1990 to 1991 economic
recession in the more developed countries - From 1992 economic expansion in
the US and most of the Western European nations |
Source:
Cardozo, E. and Helwege, A. Latin America’s economy. (Cambridge, Massachusetts: MIT, 1994), Economic Commission for Latin America
and the Caribbean. Latin America: the economic experience of the last 15 Years
-1980-1995. (Santiago, Chile: CEPAL, 1996), Inter-American Development Bank. Economic
and social progress in Latin America 1996 report.
(Washington D.C.: IDB, 1996), Jackson,
J. The world trading system. (Cambridge,
Mass.: MIT Press, 1994), Walther Ted. The world economy. (New York: John
Wiley & Sons, Inc. 1997).
3.
Results and discussion
From Table 2 to Table 5 results are presented more on an individual basis regarding
each dummy variable. A more complete
discussion of data obtained from statistical procedures is explained for Tables 6, 7 and 8
when all the dummy variables are considered simultaneously.
3.1. Latin America as a region
When we applied the model to aggregate data for the complete region during the
complete period (1960-1995), it is evident that the two most important macroeconomic
variables are labor and investment. They
appear to have a high level of significance, less than 1 percent margen of error. Notwithstanding the coefficient of determination
is low, only 27 percent, and therefore the model only explains 27 percent of the behavior
of the dependent variable. The F coefficient
has high statistical significance with a value of 98.118 -see Table 2.
Table 2
Macroeconomic Analysis: Results Considering all Latin American Countries
for Period 1960-1995
Characteristic |
Period 1960-1995 |
Intercept |
0.008 |
Labor |
1.224** |
Investment |
0.132** |
Exports (Exp/GNP) |
0.002 |
R2 |
0.271 |
F |
98.118** |
No. of Observations |
36 |
References: R2 = Coefficient of determination; F =
Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: years.
From Table 3 we can see that again labor and investment are important variables for
Latin American region. In this case region 1,
Mexico / Central America / Caribbean countries, have a significant statistical economic
growth during the period 1960-1995. This
situation can be explained by two main factors: (a)
the United States is the “natural” market for the area, with a huge internal
market[11];
and (b) the Caribbean Basin Initiative which began in 1984 was a program designed to
encourage exports from this region to the United States market. Another important feature from Table 3 is that the
seventies appear as a decade with strong economic growth in the region, more than the
economic growth from the sixties.
Table 3
Macroeconomic Analysis: Results Considering all Latin American Countries
Size of Economies, Regions, and Structure of
Exports
1960-1995
Characteristic |
Period 1960-1995 |
Intercept |
0.826 |
Labor |
0.987** |
Investment |
0.122** |
Exports (Exp/GNP) |
0.003 |
X1 |
1.118 |
X2 |
0.435 |
R1 |
0.757* |
R2 |
0.788 |
S1 |
0.222 |
S2 |
0.092 |
1960’s |
0.779 |
1970’s |
1.264** |
1980’s |
-1.086* |
R2 |
0.318 |
F |
30.395** |
No. of Observations |
36 |
References: X1 = manufacturing exports; X2 = oil exports; R1= Central American, Mexico and the Caribbean
countries; R2 = Andean countries; S1 = large economies; S2 medium economies.-specific
countries in references Tables 5.2 to 5.5.; 1960’s, 1970’s, 1980’s = decade
of sixties, seventies and eighties, respectively.
R2 = Coefficient of determination;
F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: years.
Table 4 is presented only as an illustration rather than a specific statistical
result, because of the limited number of observations, and the problems that this feature
implies with the number of degrees of freedom. In
that table, we can see how the influence of labor, investments and exports have been
developed during each decade. Again the
general trend is that labor and investment are important, even though labor appears as
lacking statistical significance during the nineties.
Table 4
Macroeconomic Analysis: Results Considering all Latin American Countries
and Decades 1960-1995
Characteristic |
1960s |
1970s |
1980s |
1990s |
Intercept |
1.292 |
0.790 |
0.789 |
2.913 |
Labor |
0.856** |
1.430** |
1.006** |
0.194 |
Investment |
0.131** |
0.088** |
0.162** |
0.102** |
Exports (Exp/GNP) |
0.001 |
0.001 |
0.001 |
0.001* |
R2 |
0.342 |
0.153 |
0.299 |
0.269 |
F |
37.482** |
13.068** |
30.839** |
15.701** |
No. of Observations |
11 |
10 |
10 |
5 |
References:
R2 = Coefficient of determination; F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: years.
3.2. Groups of Latin American countries
3.2.1. Considering size of economies
According to Table 5 the variable regarding labor shows statistical significance in
two periods 1960-73 and 1974-82. Investments
or capital factors always appear as a significant variable at 1 percent margin of error. Another important point is to realize that during
all the periods except for 1991-95 exports were significant factors for economic growth. When economic conditions in the international
economic scenario were more stable and the Bretton Wood institutions were working more in
terms of its original design, especially during the period 1960-73, the large economies of
Latin America seem to have significantly higher levels of economic growth.
Table 5
Macroeconomic Analysis: Results Considering Size of Economies
Characteristic |
Periods |
|||
|
1960/73 |
1974/82 |
1983/90 |
1991/95 |
Labor |
0.959** |
1.584** |
0.776 |
-0.226 |
Investment |
0.121** |
0.120** |
0.137** |
0.096** |
Exports (Exp/GNP) |
0.003** |
0.002** |
0.002** |
0.009 |
S1 |
2.216** |
-0.426 |
0.091 |
2.054* |
S2 |
0.866 |
-1.558 |
0.479 |
3.846** |
S3 |
0.987 |
-0.908 |
-1.038 |
2.775** |
R2 |
0.328 |
0.277 |
0.340 |
0.326 |
F |
24.660** |
12.285** |
14.616** |
8.385** |
No. of Observations |
308 |
198 |
176 |
110 |
References: S1 = Big economies: Argentina, Brazil and
Mexico; S2 = Medium economies: Chile, Colombia, Peru and Venezuela; S3 = Small economies: Bolivia, Costa Rica,
Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica,
Nicaragua, Panama, Paraguay, Trinidad and Tobago, and Uruguay. R2 = Coefficient of determination; F =
Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: number of countries (22) times number of years.
However, when international economic conditions were not so stable and yet Latin
American countries continued to implement processes of economic adjustment (period
1991-95) small and middle size economies in the region appear to have higher levels of
economic increase in Table 5.5. The F
coefficient emerges with high and significant values at 1 percent margin of error, and the
coefficient of determination was only 34. This
last number reflects the limited explanation of the model used in terms of economic
growth.
3.2.2. Considering structure of exports
Following results contained in Table 6 one realizes that labor, investments and
exports had a similar impact in economic growth as shown in Table 5. The labor factor was significant during the
periods 1960-73, and 1974-82. This result
could be associated with the internal demand factor as an element for economic growth. At the same time investments again emerge to
have a high significant statistical values -1 percent margin of error- in all periods
under study, and exports had a significant repercussion on economic growth in all periods
but 1991-95. Oil and agricultural export
oriented countries had statistical positive significance with regards to economic growth
in 1991-95. F coefficient was highly
significant, and the coefficient of determination could not rise beyond 35 percent.
Table 6
Macroeconomic Analysis: Results Considering Structure of Exports
Characteristic |
Periods |
|||
|
1960/73 |
1974/82 |
1983/90 |
1991/95 |
Labor |
0.956** |
1.430** |
0.709 |
-0.384 |
Investment |
0.122** |
0.119** |
0.136** |
0.100** |
Exports (Exp/GNP) |
0.003** |
0.002** |
0.002** |
0.001 |
X1 |
----- |
0.966 |
0.867 |
2.834 |
X2 |
1.056 |
0.319 |
-0.337 |
1.862* |
X3 |
1.151* |
-0.928 |
-0.593 |
3.486** |
R2 |
0.315 |
0.285 |
0.327 |
0.336 |
F |
27.907** |
12.797** |
13.788** |
8.779** |
No. of Observations |
308 |
198 |
176 |
110 |
References:
X1 = Manufacturing 1960/73 zero; 1974/95: Brazil; X2 = Oil 1960/73 Trinidad
and Tobago and Venezuela 1974/95 Ecuador,
Mexico, Trinidad and Tobago, and Venezuela; X3 = Agriculture and Minining 1960/73 Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti,
Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru and Uruguay 1974/95
Argentina, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Paraguay, Peru, and
Uruguay.
R2 = Coefficient of determination;
F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: number of countries (22) times number of years.
3.2.3. Considering regions
Following similar results from Tables 5 and 6, Table 7, the evidence shows the
pattern of impact on economic growth derived from the labor, investment and export
factors: (a) labor was significant during all
periods except 1991-95; (b) investments
always appeared as significant elements at a 1 percent margin of error; (c) exports were always significant except during
1991-95. Based on their regional placement,
Southern cone countries and Brazil had significant influence on economic growth during
1960-73. They and the Andean countries emerge
as having significant influence on economic expansion during 1991-95. In this last feature, a factor behind this result
could be the reinforced intratrade positions from the MERCOSUR nations -Argentina, Brazil,
Paraguay and Uruguay. They have incorporated
Chile and Bolivia as partially integrated members since 1994. Again the F coefficient appears to have high
significant values at a 1 percent margin of error, and the coefficient of determination
achieved its highest value during the periods 1983-90, and 1991-91 with 35 percent,
showing the limited scope of explanation of economic growth using the exogenous variables
of this model.
Table 7
Macroeconomic Analysis: Results Considering Regions
Characteristic |
Periods |
|||
|
1960/73 |
1974/82 |
1983/90 |
1991/95 |
Labor |
1.020** |
1.663** |
1.052** |
-0.011 |
Investment |
0.122** |
0.117** |
0.137** |
0.098** |
Exports (Exp/GNP) |
0.003** |
0.002** |
0.002** |
0.001 |
R1 |
0.971 |
-1.311 |
-1.655 |
1.685 |
R2 |
0.816 |
-1.326 |
-1.654 |
3.432** |
R3 |
1.193* |
-0.477 |
0.561 |
2.908** |
R2 |
0.316 |
0.277 |
0.356 |
0.353 |
F |
23.291** |
12.300** |
15.707** |
9.483** |
No. of Observations |
308 |
198 |
176 |
110 |
References:
R1 = Central America, Mexico, Caribbean: Mexico, Guatemala, El Salvador, Honduras,
Nicaragua, Costa Rica, Panama, Haiti, Dominican Republic, Jamaica, and Trinidad and
Tobago; R2 = Andean Countries: Colombia, Venezuela, Guyana, Ecuador, Peru, and
Bolivia; R3 = Southern Cone and Brazil, Chile, Argentina, Uruguay, Paraguay and
Brazil
R2 = Coefficient of determination;
F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: number of countries (22) times number of years.
3.2.4. Considering Positions[12]
Labor, investments and exports followed the same and consistent trend as it was
shown in other tables: (a) labor was significant during all periods except 1991-95; (b) investments always appeared as significant
elements at a 1 percent margin of error; (c)
exports were always significant except during 1991-95.
The only periods in which semiperiphery and periphery countries did not have
significant economic growth were during the generation of the regional international debt
(1974-82) and during the era of implementing economic adjustment without economic growth
(1983-1990). As usual, the F coefficient
appears to have high significant values at a 1 percent margin of error, and the
coefficient of determination achieved its highest value during the period 1983-90 with 35
percent.
Table 8
Macroeconomic Analysis: Results Considering Positions
Characteristic |
Periods |
|||
|
1960/73 |
1974/82 |
1983/90 |
1991/95 |
Labor |
0.885** |
1.546** |
0.852** |
-0.240 |
Investment |
0.122** |
0.120** |
0.136** |
0.099** |
Exports (Exp/GNP) |
0.003** |
0.002** |
0.002** |
0.001 |
P1 |
2.078** |
-0.899 |
0.698 |
2.861** |
P2 |
1.145* |
-0.867 |
-1.306 |
2.867** |
R2 |
0.324 |
0.273 |
0.356 |
0.302 |
F |
29.102** |
14.541** |
18.925** |
9.098** |
No. of Observations |
308 |
198 |
176 |
110 |
References:
P1 = Semiperiphery: 1960/73 Argentina,
Brasil, Mexico and Venezuela; 1974/95 Argentina,
Brasil, Mexico, Venezuela, Chile and Colombia; P2 = Periphery: 1960/73 Bolivia, Chile, Colombia, Costa Rica, Dominican
Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua,
Panama, Paraguay, Peru, Trinidad and Tobago, and Uruguay; 1974/95 Bolivia, Costa Rica, Dominican Republic, Ecuador,
El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Paraguay,
Peru, Trinidad and Tobago, and Uruguay
R2 = Coefficient of determination;
F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: number of countries (22) times number of years.
3.2.5. Considering results with all dummy variables
Table 9 shows the results when considering all the dummy variables as a complete
set. From these numbers one can infer that
labor maintained its significance during all periods, except during 1991-95. This situation appears to be related to the
characteristic that economic adjustment programs diminished the impact of labor on the
GNP. In turn, this characteristic was
associated with reduction in the internal effective demand, chiefly due to devaluations
and depreciations of currencies. One of the
main results of this complete scenario was the increased levels of poverty in the region.
Another important feature presented here is the highly significant degree of
investments. This variable as utilization of
capital factors appears to have notable impact on economic growth in Latin American
countries during the 36 years from 1960 to 1995. Exports
also had a heavy impact on economic expansion during all periods except 1991-95.
During this last mentioned period the weight of causality for economic growth
appears to have changed to other factors that are not included in this multiple
regressional model, as the highly statistical significance of the intercept is indicating. The coefficient of determination shows that of all
the exogenous variables, they can reach only 40 percent of the economic growth
explanation. This is evident, even though all
independent variables under consideration have notable degree of causality (F value had a
high significance, at a 1 percent margin of error).
Pertinent inferences about dummy variables are derived from Tables 7 and 8 because
colinearity was detected between semiperiphery positions and large economies. All large economies emerge as having a
semiperiphery condition.
Table 9
Macroeconomic Analysis: Results Considering all Dummy Variables
Characteristic |
Periods |
|||
|
1960/73 |
1974/82 |
1983/90 |
1991/95 |
Intercept |
0.926 |
0.310 |
0.458 |
3.848** |
Labor |
1.067** |
1.732** |
0.959* |
-0.308 |
Investment |
0.123** |
0.110** |
0.149** |
0.099** |
Exports (Exp/GNP) |
0.001 |
-0.001 |
0.001 |
-0.001 |
X1 |
----- |
1.090 |
0.231 |
-0.840 |
X2 |
0.734 |
1.530 |
0.415 |
-1.947* |
P1 |
-0.727 |
-1.606 |
3.549* |
0.068 |
R1 |
0.175 |
-1.793 |
-1.855* |
-0.776 |
R2 |
0.219 |
-1.966 |
-2.522* |
1.090 |
S1 |
1.840 |
0.650 |
-3.707* |
-0.283 |
S2 |
-0.387 |
0.377 |
-0.932 |
0.112 |
R2 |
0.263 |
0.242 |
0.350 |
0.399 |
F |
11.829** |
5.983** |
8.905** |
6.581** |
No. of Observations |
308 |
198 |
176 |
110 |
References: X1 = manufacturing exports; X2 = oil exports; P1 = semiperiphery; R1= Cetral American, Mexico
and the Caribbean countries; R2 = Andean countries; S1 = large economies; S2 medium
economies.-specific countries in references Tables 5.2 to 5.5.
R2 = Coefficient of determination;
F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: number of countries (22) times number of years.
3.2.6. Considering results with all dummy variables
except positions
From Tables 10 and 11 it is evident that labor was not important on economic growth
during the period 1991-95 only; that investments have always a significant role in
economic expansion; and that exports do not appear to have important repercussions on the
increase of regional production. Even more,
oil exports emerge as having a negative impact on economic growth during 1991-95. One explanation for this condition can be found in
the historically low price levels that oil has had, on average data, during the nineties.
Concerning Table 10 and in terms of regions, Central America / Mexico / Caribbean
nations appear to have economic growth based on their geographical location. Andean countries also experienced economic
expansion affected by regional conditions. One
factor influencing this result is the implementation of the Caribbean Basin Initiative
-CBI. It began in 1984, and among its leading
aims was to promote trade links with the United States based on foreign investments and
non traditional exports. The highest value of
the coefficient of determination was about 40 percent, and the F value as usual shows high
statistical significance.
Table 10
Macroeconomic Analysis:
Results Considering all Dummy Variables Except
Positions
Characteristic |
Periods |
|||
|
1960/73 |
1974/82 |
1983/90 |
1991/95 |
Intercept |
1.015 |
0.178 |
0.742 |
3.856** |
Labor |
1.034** |
1.726** |
0.967* |
-0.309 |
Investment |
0.123** |
0.111** |
0.152** |
0.099** |
Exports (Exp/GNP) |
-0.002 |
-0.001 |
0.001 |
-0.001 |
X1 |
----- |
1.074 |
0.290 |
-0.838 |
X2 |
0.403 |
1.302 |
0.925 |
-1.937* |
R1 |
0.206 |
-1.621 |
-2.225* |
-0.781 |
R2 |
1.999 |
-1.667 |
-3.176** |
1.078 |
S1 |
1.102 |
-0.788 |
-0.518 |
-0.221 |
S2 |
-0.463 |
-0.847 |
1.778 |
0.165 |
R2 |
0.262 |
0.239 |
0.334 |
0.399 |
F |
13.307** |
6.581** |
9.275** |
7.386** |
No. of Observations |
308 |
198 |
176 |
110 |
References:
X1 = manufacturing exports; X2 = oil exports; R1= Cetral American, Mexico and the
Caribbean countries; R2 = Andean countries; S1 = large economies; S2 medium
economies.-specific countries in references Tables 5.2 to 5.5.
R2 = Coefficient of determination;
F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: number of countries (22) times number of years.
3.2.7. Considering results with all dummy variables
except size of economies
In reference to Table 11, besides the already mentioned situation of labor,
investments and exports, as well as the oil producing countries during the nineties,
Andean countries appear to have a more negative impact during the eighties, that is during
the implementation of economic adjustment programs. Here
an important factor was that especially Argentina, Bolivia, and Brazil were having
extraordinary high levels of inflation.[13] Finally and again, the highest value of the
coefficient of determination was about 40 percent, and the F value as usual shows high
statistical significance.
Table 11
Macroeconomic Analysis:
Results Considering all Dummy Variables Except
Size of Economies
Characteristic |
Periods |
|||
|
1960/73 |
1974/82 |
1983/90 |
1991/95 |
Intercept |
1.144 |
0.344 |
0.061 |
3.808** |
Labor |
0.973** |
1.727** |
1.094* |
-0.296 |
Investment |
0.122** |
0.110** |
0.151** |
0.099** |
Exports (Exp/GNP) |
0.001 |
-0.001 |
0.003 |
-0.001 |
X1 |
----- |
1.261 |
-1.379 |
-1.062 |
X2 |
-0.157 |
1.531 |
0.154 |
-2.000* |
P1 |
0.857 |
-1.148 |
1.598 |
0.016 |
R1 |
0.311 |
-1.799 |
-1.870 |
-0.776 |
R2 |
-0.031 |
-1.953 |
-2.142* |
1.196 |
R2 |
0.257 |
0.242 |
0.333 |
0.398 |
F |
14.845** |
7.544** |
10.436** |
8.372** |
No. of Observations |
308 |
198 |
176 |
110 |
References:
X1 = manufacturing exports; X2 = oil exports; P1
= semiperiphery; R1= Cetral American, Mexico and the Caribbean countries; R2 = Andean
countries; -specific countries in references
Tables 5.2 to 5.5.
R2 = Coefficient of determination;
F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations: number of countries (22) times number of years.
3.3. Latin American countries on individual basis
This study applied the econometric analysis to individual countries rather than
including these countries as individual dummy variables with the other economic
characteristics in order to avoid problems concerning colinearity. When we apply the macroeconomic model, in terms of
the main macroeconomic variables -labor, investment, and exports- to individual countries
it is possible to define several important characteristics.
First, most of the countries appear to have investment as a crucial macroeconomic
variable for economic growth during the period 1960-1995.
The exceptions are Chile, Colombia, Ecuador, El Salvador and Honduras. Second, in the cases of El Salvador, Panama,
Venezuela, and Mexico, the labor aspect appears to have high statistical significance. Labor was also important in achieving economic
growth in the cases of Brazil, Colombia, and Guyana.
Mexico and El Salvador are the only cases in which exports constitute an important
variable for economic growth with statistical significance within the range of 5 percent
margen of error. Third, better levels for
explaining economic growth were observed in the cases of Brazil, the Dominican Republic,
Mexico and Panama. In those cases the values
for the coefficient of determination were: 64,
64, 77, and 60 percent respectively (see Table 12).
Table 12
Macroeconomic Analysis: Results Considering all Latin American Countries
and Labor, Investment and Exports,
1960-1995
No. |
Country |
Interc. |
Labor |
Invest. |
Exports |
R2 |
F |
1 |
Argentina |
7.849 |
-4.532 |
0.087* |
0.005 |
0.143 |
1.802 |
2 |
Bolivia |
4.443 |
3.098 |
0.054* |
-0.006 |
0.167 |
2.045 |
3 |
Brazil |
3.172 |
2.813* |
0.286** |
-0.013 |
0.642 |
19.076** |
4 |
Chile |
5.716 |
-0.986 |
0.068 |
0.003 |
0.132 |
1.603 |
5 |
Colombia |
1.859 |
0.946* |
0.052 |
0.008 |
0.158 |
2.023 |
6 |
Costa Rica |
10.542 |
-2.157 |
0.102** |
-0.001 |
0.384 |
6.752 |
7 |
Dominican Rep. |
6.115 |
-1.518 |
0.217** |
-0.001 |
0.642 |
19.413** |
8 |
Ecuador |
2.846 |
2.902 |
0.021 |
-0.005 |
0.154 |
1.952 |
9 |
El Salvador |
4.031 |
2.702** |
0.005 |
0.003* |
0.492 |
10.321** |
10 |
Guatemala |
6.635 |
-1.112 |
0.072* |
-0.006 |
0.201 |
2.832* |
11 |
Guyana |
1.832 |
2.274* |
0.072* |
0.002 |
0.192 |
2.632* |
12 |
Haiti |
5.868 |
-3.173 |
0.092** |
-0.001 |
0.312 |
4.843** |
13 |
Honduras |
2.448 |
0.201 |
0.093 |
0.001 |
0.142 |
1.883 |
14 |
Jamaica |
1.731 |
-0.063 |
0.182** |
0.005 |
0.442 |
8.551** |
15 |
Mexico |
1.401 |
1.742** |
0.233** |
0.001* |
0.772 |
36.974** |
16 |
Nicaragua |
0.903 |
0.763 |
0.233** |
0.002 |
0.462 |
9.312** |
17 |
Panama |
4.811 |
3.283** |
0.152** |
0.006 |
0.602 |
16.342** |
18 |
Paraguay |
0.126 |
1.262 |
0.223** |
0.003 |
0.491 |
10.253** |
19 |
Peru |
4.170 |
2.433 |
0.301** |
0.001 |
0.582 |
15.062** |
20 |
Trinidad and Tobago |
0.833 |
2.172 |
0.171** |
0.003 |
0.233 |
3.261* |
21 |
Uruguay |
0.673 |
0.691 |
0.212** |
0.001 |
0.542 |
12.536** |
22 |
Venezuela |
4.012 |
2.123** |
0.132** |
0.041 |
0.572 |
14.297** |
References:
R2 = Coefficient of determination; F = Coefficient of Fisher, from ANOVA.
* = When coefficient has statistical significance at =
0.05
** = When coefficient has statistical significance at =
0.01
No. of observations for each country: 36 (years).
When we applied analysis taking into account only the dummy variables for the years
of each decade, we can see the rates of economic growth, not only for individual
countries, but also for the region as a whole (see Table 13). From these results the high levels of economic
growth during the sixties and seventies are evident, as well as during the nineties. The eighties appear having a kind of insignificant
economic gain in terms of national production. For
some countries, nevertheless, the eighties were years that on the average represented some
kind of economic improvement. This was the
case in Brazil, Chile, Colombia, Costa Rica, and Paraguay.
These nations had an important recovery concerning their national output especially
by the end of the last decade. On the other
hand, important economic contraction can be seen particularly in the cases of Haiti and
Nicaragua.
Table 13
Macroeconomic Analysis: Results Considering all Latin American Countries
and 1960s, 1970s, 1980s and 1990s
1960-1995
No. |
Country |
1960s |
1970s |
1980s |
1990s |
R2 |
F |
1 |
Argentina |
3.908** |
3.156* |
0.433 |
3.533* |
0.102 |
0.907 |
2 |
Bolivia |
4.542** |
4.037** |
-0.228 |
4.056** |
0.436 |
6.256** |
3 |
Brazil |
5.873** |
8.549** |
3.065** |
1.162 |
0.369 |
4.665** |
4 |
Chile |
3.994* |
3.061 |
4.479** |
6.161** |
0.042 |
0.354 |
5 |
Colombia |
4.982** |
5.886** |
3.432** |
4.367** |
0.293 |
3.333* |
6 |
Costa Rica |
5.495** |
6.345** |
3.645** |
4.187** |
0.173 |
1.666 |
7 |
Dominican Rep. |
3.587* |