Identifier

etd-08122009-154515

Degree

Doctor of Philosophy (PhD)

Department

Agricultural Economics

Document Type

Dissertation

Abstract

A large body of empirical literature has investigated the linkages between exports and output. Nevertheless, empirical evidence remains inconclusive and the topic remains open to discussion. Additionally, a number of studies have examined the positive effects that export diversification may have on economic growth. Within the Latin America region, Costa Rica has been lauded for its long democratic tradition, relative economic stability, and for evolving from being a small economy heavily reliant on exports of coffee and bananas, to become the largest software exporter per capita in Latin America. This study examined the impact that the expansion and diversification of Costa Rican export supply had on economic growth. The first study provides a historical analysis of the export diversification experience in Costa Rica from the 1965 until the present. For that, a chronological assessment of the main policies and events leading to the transformation of Costa Rican export supply was presented. This paper concludes that Costa Rica was able to move its economy away from commodity dependence because of important amounts of foreign direct investment over the last two decades. Furthermore, export diversification in Costa Rica is characterized by weak linkages between multinational corporations, operating in the free trade zones, and the rest of the economy. The second paper tests the hypothesis of a long-run relationship between export diversification and economic growth in Costa Rica via externalities of learning-by-exporting and learning-by-doing. The period of analysis was from 1965 to 2006, and two types of statistical methodologies were used: the bounds test for cointegration within a distributed lag (ARDL) framework and a dynamic OLS (DOLS) model. Overall, results concluded that export diversification had no long-run effect on economic growth during the study period. The third paper tests the export-led growth (ELG) hypothesis in Costa Rica using a modified version of the Wald test for three different models for the period of 1960 to 2007 and 1965 to 2006. The ELG hypothesis was confirmed only when imports were included in the estimation. Granger-causality was also found running from imports to exports likely due to large amounts of imported inputs for multinational firms.

Date

2009

Document Availability at the Time of Submission

Release the entire work immediately for access worldwide.

Committee Chair

Harrison, R. Wes

DOI

10.31390/gradschool_dissertations.3188

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