Latin American Commodity Export Concentration: Is There a China Effect?

BBVA Working Paper 13/06

21 Pages Posted: 18 Apr 2013

See all articles by Alicia García-Herrero

Alicia García-Herrero

Bruegel; Hong Kong University of Science & Technology (HKUST) - HKUST Institute for Emerging Market Studies (IEMS); Natixis

K. C. Fung

University of California at Santa Cruz

Mario Nigrinis

BBVA

Date Written: January 21, 2013

Abstract

Given that commodity export concentration is likely to be unhelpful for economic development, we then ask the question of whether Latin America has been experiencing a more pronounced concentration of such exports. We then use different indicators to measure such concentration. Our measurements show that there may be an increase of commodity concentration exports in the last few years of this decade. This phenomenon leads us to ask the question: is the rise of China partly responsible for such an increase? We then ran formal regressions trying to explain an index of commodity export concentration across countries and over time. We control for standard explanatory variables including the relative price index of commodities, the endowment of commodities, the income effects and the quality of infrastructure. We test our hypothesis for alternative periods and using different econometric methodologies. Our results seem to indicate that there is some evidence of the China effect, i.e. the growing importance of China is positively and significantly related to increased commodity export concentration.

Keywords: Export concentration, China economic rise, Latin America de-industrialization

JEL Classification: F14, F43

Suggested Citation

Garcia-Herrero, Alicia and Fung, K.C. and Nigrinis, Mario, Latin American Commodity Export Concentration: Is There a China Effect? (January 21, 2013). BBVA Working Paper 13/06, Available at SSRN: https://ssrn.com/abstract=2253164 or http://dx.doi.org/10.2139/ssrn.2253164

Alicia Garcia-Herrero (Contact Author)

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium, 1210
Belgium

Hong Kong University of Science & Technology (HKUST) - HKUST Institute for Emerging Market Studies (IEMS) ( email )

IAS 2019, Lo Ka Chung Building,
Lee Shau Kee Campus, HKUST
Clear Water Bay, Kowloon
Hong Kong

Natixis ( email )

France

K.C. Fung

University of California at Santa Cruz ( email )

Santa Cruz, CA 95064
United States
831-459-3273 (Phone)
831-459-5900 (Fax)

Mario Nigrinis

BBVA ( email )

Paseo de Recoletos, 10
Madrid
United States

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