No. 558 - International specialization models in Latin America: the case of Argentina

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by Paola Caselli and Andrea ZaghiniJune 2005

In this paper we compare the Argentine specialization model with that of the other major Latin American countries. Given the lack of production data at disaggregate level, we rely on trade flow information from the WTA Statistics Canada database (3-digit SITC classification), available for most Latin American countries for a rather long time span (1980-2000). Our analysis, based on the Lafay Index of international specialization, shows that Argentina concentrates its comparative advantages in raw materials, agricultural and food products and exhibits, at the same time, serious deficiencies in the production of manufactures. This specialization pattern has remained remarkably stable over the last two decades, in spite of the major reforms implemented in many different fields. These features are shared with the other major Latin American countries, with the notable exception of Mexico, whose comparative advantages have changed dramatically in the same period, from raw materials (essentially oil) towards manufactures. Moreover, the products in which Argentina is specialized are among those for which world demand growth is structurally lower; this could eventually lead to a decreasing weight of Argentina in international markets.

Published in 2004 in: Studi e note di economia. Quaderni,1, pp. 55-82