Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2023-02-24
Number: 23-007/IVI
Author-Name: F. Blasques
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: P. Gorgi
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: S. J. Koopman
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: J. Sampi
Author-Workplace-Name: World Bank
Title: Does trade integration imply growth in Latin America? Evidence from a dynamic spatial spillover model
Abstract: To investigate the role of intra-regional trade integration on economic growth in Latin America,
we develop a multilevel spatial production network model with time-varying parameters. The
theoretical model is established for a multi-country and multi-sectoral economy. The reduced-form
econometric framework relies partly on observation-driven dynamic processes. The finite-sample
properties of the maximum likelihood estimates are investigated through a Monte Carlo study.
The empirical study is for six countries in Latin America. The findings suggest that intra-country
spillovers configure an important factor for explaining growth, while the importance of domestic
spillovers is limited. The growth volatility is substantively reduced since 2005.
Classification-JEL: C31, C32, F14, F43
Keywords: Spatial network model, multilevel model, time-varying parameters, economic modeling, trade liberization, growth.
File-URL: https://papers.tinbergen.nl/23007.pdf
File-Format: application/pdf
File-Size: 669.688 bytes
Handle: RePEc:tin:wpaper:20230007