Patterns of technological specialisation in Latin American and East Asian countries: an analysis of patents and trade flows

This article provides an extensive analysis of the technological specialisation of three Latin American countries (Argentina, Brazil and Mexico) and two East Asian countries (South Korea and Taiwan). Technological specialisation is measured both with respect to patents and trade flows. This article provides different measures of technological specialisation: Ricardian and Smithian specialisation indexes and the contribution to trade balance. These indicators provide a new picture of the evolution of the patterns of technological specialisation. Latin American countries show a divergent technological specialisation from East Asian countries, since the 1970s. In particular, Latin American countries display weaknesses in computers and communications and electrical and electronic sectors and their specialisation in fast growing technological classes is declining, in contrast to East Asian countries. While East Asian countries have shifted to specialised supplier or science-based sectors, Latin American countries have increased their trade specialisation in supplier-dominated or scale-intensive sectors.     

Different Impacts of Scientific and Technological Knowledge on Economic Growth: Contrasting Science and Technology Policy in East Asia and Latin America

This paper conducts country‐panel econometric analysis with a focus on the different roles of scientific and technological knowledge on economic growth and on the knowledge production functions. It finds that it is not scientific knowledge (academic articles) but technological knowledge (patents) that matters for economic growth, and that generating scientific knowledge does not automatically lead to the generation of technological knowledge. We find that technological knowledge is primarily determined by corporate research and development efforts, which used to be more lacking in Latin American countries, compared with East Asia. This finding sheds new light on the question of why Latin American and East Asian countries have shown such divergent economic performances.     

Global Defeminization? Industrial Upgrading and Manufacturing Employment in Developing Countries

Globalization has for decades been associated with a rise in the female share of employment or feminization. This study finds that since the mid 1980s, export growth in developing countries is associated with feminization in some countries and a defeminization in others. Focusing on Southeast Asia and Latin America, it uses a fixed-effects econometric model to test whether the technological conditions of production (labor or capital intensity) rather than export growth account for shifts in the female share of employment in manufacturing. It finds that the capital intensity of production, evidenced by shifts in labor productivity, is negatively and significantly related to shifts in the female share of employment in manufacturing, while exports are statistically insignificant. The study concludes that an anti-female bias exists in labor demand changes that result from output or employment shifts in developing countries when manufacturing becomes more capital intensive, a process likely related to industrial upgrading.     

How to measure innovation? New evidence of the technology–growth linkage

It is an undoubtful fact that economic growth depends, ultima ratio, on the production of new ideas. This article aims to contribute to the long-standing debate on the choice of the best proxy to measure innovation and technological diffusion, by offering alternative variables which are tested empirically by means of a panel dataset of 73 countries between 1980 and 2005. Two different proxies of technological progress (patents and a Intellectual Property Rights Index) are used to explain different growth rates of income per capita and, after controlling for endogeneity, our results suggest that both have a positive effect on innovation (and economic growth).     

The contribution of domestic, regional and international factors to Latin America's business cycle

This paper quantifies the relative contribution of domestic, regional and international factors to the fluctuation of domestic output in six key Latin American (LA) countries: Argentina, Bolivia, Brazil, Chile, Mexico and Peru. Using quarterly data over the period 1980:1-2003:4, a multi-variate, multi-country time series model was estimated to study the economic interdependence among LA countries and, in addition, between each of them and the three world largest industrial economies: the US, the Euro Area and Japan. Falsifying a common suspicion, it is shown that the proportion of LA countries' domestic output variability explained by industrial countries' factors is modest. By contrast, domestic and regional factors account for the main share of output variability at all simulation horizons. The implications for the choice of the exchange rate regime are also discussed.     

Standardised capital stock estimates in Latin America: a 1950-94 update

Capital stock estimates are used extensively in many areas ofeconomic research, in spite of both theoretical and practicaldifficulties with respect to their use, estimation and meaning.The lack of comparable capital stock estimates in Latin Americahas hindered analysis of economic development in the regionand comparisons with other developed and developing countries.Standardised gross and net fixed capital stock estimates forthe 1950-94 period are presented for seven Latin American countries:Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Venezuela.The methodology employed is the 'perpetual inventory method'which estimates capital stocks as a weighted sum of past investmentflows. Several methodological issues are discussed, especiallydepreciation and service life estimation. Capital stocks havebeen disaggregated in machinery and equipment, non-residentialand residential structures with services lives of 15, 40 and50 years respectively.     

The harnessing of biotechnology in India: Which roads to travel?

In India, as in most developing countries, biotechnology was ushered in through public policy rather than individual firm initiatives. Throughout the 1980s and until the mid-1990s the focus of public policy was on creation of scientific capabilities and building of awareness of the potential of biotechnology. With the adoption of economic liberalization in the 1990s, the Indian State also began to sponsor private initiatives in capacity building. Today, the leading Indian firms have commercialized generic versions of original innovations developed by US and Japanese firms, using the traditional route of re-engineering. A handful of firms are actively engaged in first order innovation and in addition, a number of start-ups have emerged to make use of opportunities to provide contract research services to Western and Japanese multinationals. But can a focus on bio-generics and contracting for multinationals be used as a route for competence building and as a stepping stone to become original innovators? The present article shows that while India has ‘strong scientific and technological capabilities’, it is constrained by weak ‘social capabilities’ of its labor force, lack of ‘institutional capabilities’ in regulation and financing, infrastructural constraints and absence of national programs to achieve concrete targets in terms of biotechnology innovations to promote a more inclusive development.     

On the evolution of technological specialization patterns in emerging countries: comparing Asia and Latin America

This paper explores the role of technological opportunity and cumulativeness in the evolution of technological specialization patterns (TSP) in catching-up processes. Concretely, I assume that opportunity induces mobility while cumulativeness leads to diversification and stability. The empirical analysis uses patent data indicators for nine Asian and Latin American countries between 1978 and 2012. The paper shows that, during economic liberalization (although with different timings), emerging countries caught up and redefined the path of technological accumulation for Asian and Latin American countries. With the exception of Hong Kong, all the countries increased their technology share, but they ran in different directions. Asian countries made greater relative efforts in dynamic technologies, while Latin American countries focused on stagnant technologies. In this sense, Asian countries achieved a more successful performance, building new technological bases and taking a technological leap in some of the more dynamic technologies. Meanwhile, Latin American countries left their technological bases unchanged. The paper also shows that, at the beginning of the catching-up cycle, the TSPs were turbulent. Afterwards, cumulativeness in the technological choice induced the diversification and stabilization of the TSPs.     

On the Transmission Mechanism of Monetary Constraints to the Real Side of the Economy

Contrary to the predictions of the theory underlying international finance, inflows of capital triggered by financial liberalisation have neither equalised real interest rates nor increased income growth in many emerging economies. We explain this puzzle by developing a model that combines the balance‐of‐payments constraint approach to economic growth with a less stringent version of the real interest rate parity hypothesis. The model’s foundations are based on robust empirical findings or well‐established macroeconomic models. We show that a perverse combination of income elasticities of demand for imports and exports generates slow income growth and high real interest rates. As domestic income grows and imports rise faster than exports, the real exchange rate is expected to depreciate in order to clear the balance of payments (or the foreign exchange rate market). An incipient capital outflow arises and interest rates increase. Faster adjustment in capital rather than in the goods market therefore generates a higher real interest rate differential between the domestic small open‐economy and the rest of the world. The long run analysis shows that a constant degree of risk aversion implies a positive equilibrium real interest rate differential that affects economic growth. A permanent increase in default risk driven by persistent current account imbalances thus impacts on long run growth. The model’s results are illustrated with evidence from the three major Latin America economies: Argentina, Brazil and Mexico.     

Persistence and determinants of income inequality: The Brazilian case

Latin America, which is a region known for its high and persistent income inequality levels, experienced a significant decline in income inequality since the second half of the 1990s. Brazil is a particularly interesting case in Latin America. While the country presented notable economic growth and improvements in income distribution in the early 2000s, Brazil continues to experience high levels of income inequality in comparison with other Latin American or advanced economies. This research contributes to the literature by examining the key drivers of income distribution and the degree of persistence of income inequality among Brazilian states. This research also improves upon previous works by using more recent and comprehensive data and addressing concerns regarding heterogeneity and endogeneity by using the system GMM estimation method. Our findings show that income inequality is highly persistent across Brazilian states and that government policies including income transfer programs made important contributions to reduce income inequality in Brazil. This study also shows that the decline in labor income ratios between different ethnic groups and the increase of the share of formal jobs in the labor market contributed to reduce income inequality.     

The knowledge bases of the world’s largest pharmaceutical groups: what do patent citations to non-patent literature reveal?

This article examines the knowledge bases of the world’s largest pharmaceutical groups by sales. It builds upon the concepts of knowledge specialisation and knowledge integration as the relevant dimensions along which knowledge bases can be mapped. The former is studied developing indicators of breadth. Breadth is measured by analysing the evolution of specialisation by scientific field over time. It hints at the widening range of bodies of scientific and technological knowledge relevant to firms’ innovative activities. Knowledge integration is studied developing indicators of depth. Depth is measured by analysing the evolution of integration across different typologies of research. It hints at the complex, non-linear interdependencies that link the scientific and technological domains. We develop the analysis on the strength of an original database of 33,127 European Patent Office patents and 41,931 citations to ‘non-patent document’ (of which 19,494 were identified as scientific articles included in the ISI databases) of the 30 largest pharmaceuticals groups during the period 1990–1997. The groups studied seem to have incrementally increased the breadth of their knowledge bases, moving towards the fields proper to the new biopharmaceutical research trajectory. At the same time, some of the groups studied exhibit remarkable depth in knowledge integration in particular fields such as biotechnology, biochemical research and neurosciences.     

Constructing Projects of National Development in Latin America?

Abstract

This article analyzes technology-related development in Latin America from a heterodox perspective based in Institutionalist and Structuralist Economics. Since the 1970s, the lack of systematic national projects designed to institutionalize endogenous innovation capabilities in the region has constituted a critical structural impediment to development. Eschewing the creation of public goods, most nations in Latin America abandoned important incipient efforts to develop technological autonomy as undertaken during the state-led industrialization period. This article highlights poorly understood but relatively successful aspects of the import substitution industrialization (ISI) strategy on technological advancement in the state-led era. Recently, neoliberalism's monolithic grip has been loosened. Brazil has undergone somewhat of a paradigmatic shift while advancing toward the creation of a national innovation system (NIS), thereby offering important lessons for other Latin American nations. Mexico, in contrast, shows no indication of attaining autonomous technological capabilities. The attainment of such capabilities in highly industrialized countries, and fast developing Asian nations, partially resulted from the construction of a NIS. The creation of a NIS embodies an interactive and interdependent process: it entails the joint and combined participation of scientists and others involved in research and development (R&D) activities in (1) the public and private sectors and (2) universities. These elements combine with agents of the state empowered to finance and coordinate the construction and maintenance of the NIS. The construction of a NIS has induced “increasing returns” in production processes. As Furtado emphasized, supply-enhancing technological capacity must be met by inclusive demand-enhancing policies that embed the vast underlying population in the growth process.     

The effects of trade,aid, and investment on China's image in Latin America

Using repeated cross-sectional survey data, we analyze whether China's growing economic engagement in Latin America has an effect on citizens’ perceptions of China within 18 Latin American countries over the 2002–2013 period. Our instrumental-variables regressions exploit exogenous variation in the supply of Chinese exports, aid, and investment. Specifically, we use China's market penetration of developing countries outside of Latin America as the instrumental variable. In contrast to the widespread criticism, we do not find evidence that China's growing economic activities in the respective countries diminish average attitudes towards China—neither at the national nor at the provincial level. However, China's economic engagement appears to contribute to more polarized opinions on China: more individuals develop either very positive or very negative opinions on China. We interpret this as suggestive evidence that China's economic engagement creates winners and losers.     

Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis

Between 2003 and 2010, Latin America experienced a solid record of economic growth, coupled with a notable reduction in income inequality. The regional Gini coefficient fell from 0.556 to 0.521 and declined in all 15 out of 17 countries in which frequent data are available. However, previous studies have warned about problems in the sustainability of the decline in income inequality and this study presents evidence of stagnation on this front between 2010 and 2013. The results are robust to various measures of income inequality, but differ across the region. While largely attributable to the recovery from the global financial crisis in Mexico and some countries in Central America, the results are also supported by the demonstrated slowdown in inequality reduction in other countries, including Brazil, Ecuador and Bolivia.     

LATIN AMERICAN EXCHANGE RATE DEPENDENCIES: A REGULAR VINE COPULA APPROACH

This study implements a regular vine copula methodology to evaluate the level of contagion among the exchange rates of six Latin American countries (Argentina, Brazil, Chile, Colombia, Mexico, and Peru) from June 2005 to April 2012. We measure contagion in terms of tail dependence coefficients, following Fratzscher's (1999) definition of contagion as interdependence. Our results indicate that these countries are divided into two blocks. The first block consists of Brazil, Colombia, Chile, and Mexico, whose exchange rates exhibit the largest dependence coefficients, and the second block consists of Argentina and Peru, whose exchange rate dependence coefficients with other Latin American countries are low. We also found that most of the Latin American exchange rate pairs exhibit asymmetric behaviors characterized by nonsignificant upper tail dependence and significant lower tail dependence. These results imply that there exists contagion in Latin American exchange rates in periods of large appreciations, whereas there is no evidence of contagion during periods of currency depreciation. This empirical regularity may reflect the “fear of appreciation” in emerging economies identified by Levy‐Yeyati, Sturzenegger, and Gluzmann (2013). (JEL C32, C51, E42)     

IS NORTH‐SOUTH TRADE‐RELATED TECHNOLOGY DIFFUSION REGIONAL?

There is an influential literature on trade-related technology diffusion. This article contributes to that literature by investigating whether north-south trade-related technology diffusion has a regional dimension. To do so, we build a weighted foreign research and development index at the industry level to account for international and interindustry technology spillovers. Using parallel analysis for nine developing countries, we find: (1) north-south trade-related technology diffusion is strong and significant and (2) north-south technology diffusion tends to have a regional dimension: developing countries in Asia, Latin America, and the Middle East tend to benefit, respectively, more from trade with Japan, North America, and Europe than from trade with other northern regions. ( JEL F1, F15)     

From Neoliberalism to Neo-developmentalism? The Political Economy of Post-crisis Argentina (2002–2015)

Argentina’s post-crisis political economy was viewed as part of the emergence of a post-neoliberal governance and the rise of New Left governments in Latin America in the past decade that marked a renewal of state activism in economy and poverty reduction. Using the concept of ‘new developmentalism’ described by Bresser-Pereira, this article offers a more nuanced approach to post-neoliberalism in Argentina. It argues that the post-neoliberal project or neo-developmentalism in Argentina does not mark a distinct departure from neoliberalism. Instead, it embodies a hybrid and complex process that maintains the core elements of economic liberalism. This article aims to contribute to the debates on post-neoliberalism and the New Left in Latin America.     

Productive efficiency and growth policies for the Caribbean

Productive (economic) efficiency and factors affecting it was evaluated in the Caribbean between 1983 to 1992. Results from non-parametric programming indicated that efficiency (i.e. pure technical, allocative and economic) measures were lower and more variable in Caribbean than in other Western Hemisphere countries (i.e. North America and Latin America). Tobit regression analysis indicated higher levels of private and foreign investments, productive infrastructure, credit availability, education level, and consumption of domestically produced goods had positive impacts on the efficiency measures. On the other hand, higher levels of public expenditure, income tax, and export taxes, and higher inflation rates had negative effects. These results support the current trend towards advocating more open economies (i.e. letting the free market work) and encouraging governments to confine their functions to facilitative/regulatory type roles and to undertaking tasks that are not generally undertaken by the private sector (e.g. developing infrastructure, providing education). Although, generally, the same factors were associated with efficiency in the Caribbean and Latin America, their relative impacts differed. Consequently, in order to improve efficiency in the Caribbean countries, relatively greater emphasis should be placed on encouraging foreign and private investment and developing infrastructure than would be the case in Latin American countries.     

Latin America after the global crisis: the role of export-led and tradable-led growth regimes

Is the ongoing economic slowdown in industrialized countries likely to impact Latin American growth negatively in the medium- to long-run? This paper considers various transmission channels that work through trade in goods and services, and finds econometric evidence suggesting that shrinking global imbalances may create problems for Latin America. Specifically, using panel data analysis, we find that the trade balance as a proportion of GDP is positively associated with Latin American economic growth over the period 1953–2009. We then develop a simple dynamic model to help explain our main finding through investment and saving behaviour.