Trapped in bad specialization: premature deindustrialization and unstable growth in LACs

María Gómez, Giovanni Dosi, Federico Riccio and Maria Enrica Virgillito

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: Over the last forty years, Latin American countries (LACs) have experienced a variety of specialization trajectories, while sharing a common pattern of weak and unstable growth. Given the accelerated premature deindustrialization path and the loss of productive capacity, manufacturing has represented a missed opportunity for development. The result has been a stable landing into a middle-income trap and economic stagnation. Accordingly, this paper addresses the relationship between sectoral productive composition, growth performance and its variability. Using the UN-COMTRADE and the Penn World Table 10.1 databases between 1962 and 2017, we account for the specialization strategies of LACs, linking aggregate output, export products, and sectoral composition. In a nutshell, we examine the extent to which revealed comparative advantages, at the country or the technological (Pavitt) class level, and the relative composition of the export baskets exert any significant role in explaining output growth and volatility. According to our findings, specializing in factor endowments and natural resources has brought LACs into a trap of halted catching up.

Keywords: Structural Change; sectoral composition; Latin America (search for similar items in EconPapers)
Date: 2025-02-24
New Economics Papers: this item is included in nep-dev
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.lem.sssup.it/WPLem/files/2025-05.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2025/05

Access Statistics for this paper

More papers in LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).