Revisiting economic growth in Colombia. A microeconomic perspective

Marcela Meléndez and Arturo Harker Roa

No 9137, Working Papers Series. Documentos de Trabajo from Fedesarrollo

Abstract: This paper revisits economic growth in Colombia using the growth diagnostics methodology proposed by Hausmann, Rodrik and Velasco (2005), with the purpose of identifying the most binding constraints for economic growth and the policies that, if implemented, can have the largest positive impact. To rank public policy priorities the HRV (2005) methodological approach is complemented with an econometric analysis of micro-data, aimed at exploring the impact that the various potential constraints to growth have had on firm-level investment decisions. The data shows economic reactivation in areas with falling violence. Results from analysis at the microeconomic level, however, give a particular spin to this conclusion by showing that investment decisions at the firm level are also explained by the restoration of some form of public order connected to the cessation of paramilitary violence and not only by the reduction of violence. From a public policy perspective, perhaps the most relevant result is the confirmation that in Colombia investment decisions are negatively affected by thecost of financing. Empirical results, robust across model specifications, single out the provision of access to financing at fair prices as a policy priority for economic growth, relevant across country regions and independent of whether uncertainties from poor protection to property rights are resolved.

Keywords: Crecimiento económico; Colombia (search for similar items in EconPapers)
JEL-codes: O40 (search for similar items in EconPapers)
Pages: 37
Date: 2008-01-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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http://hdl.handle.net/11445/249

Related works:
Working Paper: Revisiting Economic Growth in Colombia: A Microeconomic Perspective (2008)
Working Paper: Revisiting Economic Growth in Colombia: A Microeconomic Perspective (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000123:009137

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