Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93000
Authors: 
Camarero, Mariam
Martínez-Zarzoso, Inmaculada
Nowak-Lehmenn D., Felicitas
Tamarit, Cecilio
Year of Publication: 
2013
Series/Report no.: 
Discussion Papers, Ibero America Institute for Economic Research 226
Abstract: 
In this article we present evidence of the long-run effect of trade openness on income per worker for two regions that have followed different liberalization strategies, namely Asia and Latin America. A model that re-examines these questions is estimated for two panels of Asian and Latin American countries over the 1980-2008 period using a novel empirical approach that accounts for endogeneity as well as for the time series properties of the variables involved. From an econometric point of view, we apply recent panel cointegration techniques based on factor models that account for two additional elements usually neglected in previous empirical literature: cross-dependence and structural breaks. The results point to a positive impact of trade openness in both Asia and Latin America although the size is smaller in the second region. We associate this finding with the degree to which trade was managed in both regions of the developing world.
Subjects: 
GDP per worker
trade openness
panel cointegration
structural breaks
crosssection dependence
Asia
Latin America
JEL: 
F15
F43
C22
O40
Document Type: 
Working Paper

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