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Economic Policy

Selected Works

Luisa Blanco

2015

Articles 1 - 9 of 9

Full-Text Articles in Social and Behavioral Sciences

Long Live Democracy: The Determinants Of Political Instability In Latin America, Luisa Blanco, Robin Grier Sep 2015

Long Live Democracy: The Determinants Of Political Instability In Latin America, Luisa Blanco, Robin Grier

Luisa Blanco

In this paper, we investigate the determinants of political instability in Latin America. In a panel of 18 Latin American countries from 1971 to 2000, we find that democratic countries experience less average instability in the region, indicating that the move to increased democracy in the last couple decades may alleviate the persistent problem of instability in the area. We also find that income inequality and ethnic fractionalization are important determinants of instability. Countries with low levels of inequality also suffer less instability on average, while ethnic diversity has a non-linear effect on instability. Many macroeconomic variables commonly thought to …

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Tax Havens And Fdi Spillovers: Implications For Ldcs, Luisa Blanco, Cynthia Rogers Sep 2015

Tax Havens And Fdi Spillovers: Implications For Ldcs, Luisa Blanco, Cynthia Rogers

Luisa Blanco

Tax competition and spillover models offer ambiguous predictions concerning the economic impact of tax havens on non-tax havens. The implications of tax havens for less developed countries (LDCs), in particular, are not well understood and are little studied. This paper investigates the impact of tax havens on non-tax haven countries in terms of foreign direct investment (FDI). We investigate the importance of agglomeration effects by accounting for the level of FDI inflows as well as the role of geography by measuring proximity to the nearest tax haven. Our analysis yields several interesting findings. First, using panel data for 142 countries, …

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Competition Between Tax Havens: Does Proximity Matter?, Luisa Blanco, Cynthia Rogers Sep 2015

Competition Between Tax Havens: Does Proximity Matter?, Luisa Blanco, Cynthia Rogers

Luisa Blanco

We study whether proximity to the nearest tax haven affects FDI and the number of American affiliates in a tax haven. Our results show that distance to the nearest tax haven is positively related to FDI inflows and the number of American affiliates in tax havens. These findings suggest that there is a harmful competition between tax havens. We also find evidence of positive spillovers: the number of American affiliates in a tax haven is positively related to the number of in its closest neighboring tax haven. This suggests the presence of agglomeration benefits given there is an affiliate in …

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The Finance–Growth Link Revisited And The Role Of Institutions As A Source Of Finance In Latin America, Luisa Blanco Sep 2015

The Finance–Growth Link Revisited And The Role Of Institutions As A Source Of Finance In Latin America, Luisa Blanco

Luisa Blanco

In a panel framework that includes 18 countries, this paper studies the short and long run effect of financial development on economic growth and the determinants of financial development in Latin America. Financial development shows a positive effect on economic growth in the long run, but a negative effect in the short run for the full sample. When the sample is divided by income levels, this result holds only for the high income group. For the low income group, financial development has no significant effect on economic growth in the short run or in the long run. In the analysis …

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Life Is Unfair In Latin America, But Does It Matter For Growth?, Luisa Blanco Sep 2015

Life Is Unfair In Latin America, But Does It Matter For Growth?, Luisa Blanco

Luisa Blanco

I analyze the effect of inequality on economic growth in Latin America, where inequality is measured as the area of family farms as a percentage of the total area of agricultural holdings. Using data from 18 Latin American countries between 1960 and 2004, I find that inequality has a nonlinear effect on economic growth. Overall, for the countries included in this analysis, the share of family farms has a positive significant effect on economic growth. These findings are robust to controlling for several factors, using a different indicator of inequality (land Gini), and addressing for endogeneity.

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The Impact Of Research And Development On Economic Growth And Productivity In The Us States, Luisa Blanco, James Prieger, Ji Gu Sep 2015

The Impact Of Research And Development On Economic Growth And Productivity In The Us States, Luisa Blanco, James Prieger, Ji Gu

Luisa Blanco

We estimate the impact of R&D on TFP and output in the private sector at the state level in the US from 1963 to 2007. R&D has a large effect on both output and TFP at the state level in the long run. The R&D elasticity in a state averages 0.056 to 0.143, implying returns to state GDP from R&D spending of 83% to 213%. There are also positive R&D spillovers, with 77% of the total returns accruing to other states. The R&D elasticities are either stable or increase slightly after 1993. The effects of R&D are dependent on the …

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The (Non) Effect Of Natural Resource Dependence On Capital Accumulation In Latin America, Luisa Blanco, Robin Grier Sep 2015

The (Non) Effect Of Natural Resource Dependence On Capital Accumulation In Latin America, Luisa Blanco, Robin Grier

Luisa Blanco

In a simultaneous model of human and physical capital accumulation for 17 Latin American countries from 1975 to 2004, we show that overall resource dependence is not significantly related to physical and human capital. Disaggregating the natural resource variable into subcategories, we find that petroleum export dependence is associated with higher physical capital and lower human capital, while agricultural export dependence is often associated with lower levels of physical capital. All of these effects are quantitatively small, however, casting doubt on the idea that natural resource dependence has stifled the accumulation of capital in the region.

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The Finance–Growth Link In Latin America, Luisa Blanco Sep 2015

The Finance–Growth Link In Latin America, Luisa Blanco

Luisa Blanco

This paper analyzes the relationship between financial development and economic growth in Latin America with a Granger causality test and impulse response functions in a panel vector autoregression model. Using annual observations from a sample of 18 countries from 1962 to 2005, it is shown that while economic growth causes financial development, financial development does not cause economic growth. This finding is robust to different model specifications and different financial indicators. Interestingly, when the sample is divided according to different income levels and institutional quality, there is two way causality between financial development and economic growth only for the middle …

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The Impact Of Spatial Interdependence On Fdi In Latin America, Luisa Blanco Sep 2015

The Impact Of Spatial Interdependence On Fdi In Latin America, Luisa Blanco

Luisa Blanco

This analysis considers whether spatial interdependence is an important determinant of foreign direct investment (FDI) in Latin America. Two types of spatial interdependence are explored: 1) surrounding market potential and 2) spatial autocorrelation of FDI. Using a sample of 17 Latin American countries, with observations from 1986 to 2006, we find that spatial interdependence matters for world net FDI in the region. Surrounding market potential has a positive effect on FDI of significant magnitude, but there is no evidence that FDI is spatially autocorrelated. Other contributors to FDI in this analysis include governance, specifically control of corruption, and exports of …

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