Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/115372
Authors: 
Estevadeordal, Antoni
Volpe Martincus, Christian
Year of Publication: 
2009
Series/Report no.: 
IDB Working Paper Series IDB-WP-134
Abstract: 
Trade liberalization leads to significant changes in countries' economic structures. The implied variation in the level and nature of specialization has important consequences for liberalizing economies. It is therefore extremely relevant for those countries pursuing trade liberalization initiatives to know how their specialization profiles would look like under lower trade costs. This paper examines the impact of trade policy on production specialization patterns in ten Latin American countries (Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela) over the period 1990-2001, and explicitly assesses the potential implications of a trade agreement with the United States. A theory-consistent measure of specialization is derived from the standard international trade theory: the share of the industry in a country's GDP. The role of trade policy in shaping the distribution of these shares is investigated using a simultaneous equation approach on sectoral value added and tariff and factor endowment data. Estimates are then used to predict countries' specialization patterns under a trade arrangement with the United States.
Subjects: 
Specialization
Trade Policy
Latin America
JEL: 
F11
F15
C14
C23
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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