Colombian Exports Research Articles

A sectoral analysis of a developing country's exports in the context of trade integration: Evidence from Colombia

The research delves into the effectiveness of Colombia's trade liberalisation process in boosting its exports at the industrial level. Based on an empirical workhorse approach to international trade, the gravity model, we evaluate the effect of trade openness on Colombian exports at the industrial level following the SITC4 categorisation. For this purpose, panel data on Colombian exports to all its trading partners between 2007 and 2020 were used. The results establish that Colombia's trade openness has boosted the exports of most of its industries, except for exports of the mineral fuels, lubricants and related materials group, which is a group of goods that represents the country's largest exports. Furthermore, the research also confirms the prominent impact of labour productivity in boosting Colombian exports of most product groups. Consequently, Colombian policymakers should support a re-composition of the Colombian export basket in order to take proper advantage of trade integration formulas, within a global energy transition framework.

Regional resilience during COVID-19: evidence from Colombian exporting clusters

ABSTRACT This study characterises the geography of Colombian exporters and their response to the COVID-19 crisis. We define exporting clusters within departments using bipartite network analysis and community detection tools. The methodology empirically detects product communities – groups of products that are strongly related – which are compared with an alternative taxonomy of industrial clusters, and clusters exporting firms by considering their exports within these taxonomies. We define these groups of specialised firms localised in departments as exporting clusters. We then examine whether belonging to an exporting cluster can enhance firms’ trade margins. We find that clusters do not automatically improve firms’ trade margins and that there are differences in how firms react to a crisis within clusters. Our analysis contributes to regional studies by shedding light on the potential of exporters’ agglomerations to navigate and recover from crises and outlining critical firm characteristics that can strengthen regional resilience.

Search and learning in export markets: Evidence from interviews with Colombian exporters

AbstractWhy do most new exporters quickly abandon foreign markets after shipping very small amounts? And what are the investments that exporters need to make to succeed in exporting? A large literature uses models and customs records to address these questions. We complement these studies by conducting case study interviews with a small set of Colombian manufacturers of plastic products with limited differentiation. Inter alia, we find that establishing a lasting foreign market presence involves a costly search and learning process, with valuable knowledge coming from initial failures. Our interviews shed light on the specific types of hurdles the exporters face and investments they make to overcome such barriers.

Coffee tastes bitter: education and the coffee economy in Colombia in the late nineteenth and early twentieth centuries

Abstract In the late nineteenth and early twentieth centuries, coffee became the main Colombian export, turning the country into one of the world’s leading coffee producers. This agrarian commodity provided resources for coffee-growing areas, favouring the rise of mass education. However, this paper suggests that coffee led to children ceasing to attend school to work in coffee production, thus affecting the demand for education adversely. We test this hypothesis by using different empirical strategies. We conduct panel regressions and instrumental variable cross-sectional estimates. The results show that increasing coffee production negatively affects the demand for the education of primary school-age children.

Export failure and its consequences: evidence from Colombian exporters

Export failure and its consequences: evidence from Colombian exporters

An empirical analysis of Colombia's trade liberalization process and its effect on the equilibrium of its structural trade deficit

AbstractThis article examines the extent to which Colombia's trade liberalization, as a government strategy to boost its exports, has helped to balance its structural trade deficit. Based on the trade gravity model theory, we derive two‐way specifications (Colombian exports and imports) in order to analyze bilateral trade flows (fuels and non‐fuels) between Colombia and 136 countries from 2005 to 2018. Additionally, we compare the real export performance of Colombia with its main partners through the trade potential index (TPI), to assess the effect of Colombia's openness on bilateral trade. The econometric approach indicates that the free trade agreement (FTA) factor has a negative net effect on Colombia's exports and a positive net impact on Colombia's imports. Finally, the TPI analysis allows us to infer that although there is an evolution towards the intensification of Colombian trade, this trend is greater in imports than in exports, which suggests a deepening of the Colombian trade deficit.

The role of institutional quality in the international trade of a Latin American country: evidence from Colombian export performance

This paper analyses the relevance of Colombian institutional quality in recent years in terms of the performance of its exports within a framework of trade openness. Based on the trade gravity model, we examine the effect of governance on the evolution of Colombian exports through an econometric approach that identifies, on the one hand, the influence of institutional quality, and on the other hand, the influence of the institutional distance between Colombia and its trading partners. We use a panel data set for 2005–2018, through which the export flows from Colombia to 136 of its trading partners are considered. The findings indicate that Colombian institutional quality and the institutional distance between the country and its partners are statistically significant and affect its foreign sales. Similarly, there is a prominent influence of regulatory quality and the rule of law variables in the performance of Colombian exports in relation to other variables included in the model. We conclude that the Colombian government must improve its institutional quality considerably as a fundamental step towards boosting its overseas sales, not least because the country’s institutional distance from the world average is notable, which also affects its exports.

Impactos de la volatilidad cambial del comercio colombiano con sus principales socios comerciales

Objetivo: Investigar los principales impactos de la volatilidad cambiaria sobre las exportaciones colombianas de sus principales socios comerciales para el periodo 2001-2019, con el uso de variables de control además de la medida de volatilidad cambiaria, como el pib de los países, distancia y dummy variables de contigüidad y lenguaje común. Metodología: mco agrupado, modelos de panel de efectos fijos y aleatorios y modelo de pseudo máxima verosimilitud de Poisson. Resultados: Los resultados mostraron que la volatilidad cambiaria es perjudicial para la relación comercial entre Colombia y sus socios comerciales. Un aumento de 1% en la volatilidad cambiaria en el largo plazo puede reducir las exportaciones colombianas en 0.25-0.4%. Los resultados también sugieren que la información pasada es particularmente relevante para evaluar el impacto de la volatilidad en el comercio. Como se esperaba, los ingresos de los exportadores e importadores pueden aumentar el comercio y la distancia puede reducir el comercio. Limitaciones: Los datos sectoriales utilizados se pueden explorar mejor. Originalidad: Por primera vez se utiliza esta metodología y análisis de datos para investigar el impacto de la volatilidad cambiaria en el comercio colombiano. Conclusiones: Los resultados añaden otra evidencia empírica a la literatura sobre tipo de cambio y comercio, donde las políticas económicas que apuntan a estabilizar el tipo de cambio probablemente aumentarán el volumen de comercio para Colombia y sus socios comerciales. Recepción: 25/05/2020 Aceptación: 10/03/2021

Success Factors in the Internalisation of Export Companies in Colombia

Export success is one of the key aspect of economic growth of a country because it is the principle means of specialising, developing economies of scale, accessing new technologies and attracting foreign investment. For this reason, the significance of this topic has encouraged scientists to investigate the main factors that play a part in the development and application of successful export strategies. This article analyses the export success of Colombian businesses from the behaviour of variables at the business and sectoral levels. The research aims to characterise the relevant conditions affecting the entry of small and medium-sized enterprises (SMEs) into the foreign market, which can be useful for business owners who are in the process of internationalisation; they can also be considered as an instrument for developing policies promoting exports from Colombia. A multilevel model is estimated for a sample of Colombian businesses. We examined international experience, export commitment and export strategy as business factors that positively influence export success, as well as export assistance programmes, networks, tariff legislation, sector size and innovation as sectoral factors. It was concluded that the export destination, the country’s conditions and regulations should be examined before the beginning of the export process. However, Colombian exporters usually choose international destinations without such an analysis. In addition, government support through programmes and tariff legislation leads to greater business dynamism, favours entry into new markets and helps compensate negative results of international destinations.

Editorial

Editorial

We are what we do - The added value of exports from Colombia and Valle del Cauca 2016

This paper presents the calculation of added value for exports from Colombia and Valle del Cauca in 2016 through the use of input output matrixes. It finds that the added value of Colombian exports, measured as a percentage of total value of exports was 86.5%. For Valle del Cauca, this indicator was 60.9% reflecting a greater industrial and agro-industrial vocation that demands more inputs, both domestic and imported. The productive sector whose exports contributed the most added value to the economy of Valle del Cauca was food products. Among the main challenges, in terms of public policy and business development that stem from this study, are the consolidation of more integrated regional economies and the attracting of foreign direct investment in sectors that stimulate the production of intermediate goods.

Dominant Currency Paradigm

We propose a “dominant currency paradigm” with three key features: dominant currency pricing, pricing complementarities, and imported inputs in production. We test this paradigm using a new dataset of bilateral price and volume indices for more than 2,500 country pairs that covers 91 percent of world trade, as well as detailed firm-product-country data for Colombian exports and imports. In strong support of the paradigm we find that (i) noncommodities terms-of-trade are uncorrelated with exchange rates; (ii) the dollar exchange rate quantitatively dominates the bilateral exchange rate in price pass-through and trade elasticity regressions, and this effect is increasing in the share of imports invoiced in dollars; (iii) US import volumes are significantly less sensitive to bilateral exchange rates, compared to other countries’ imports; (iv) a 1 percent US dollar appreciation against all other currencies predicts a 0.6 percent decline within a year in the volume of total trade between countries in the rest of the world, controlling for the global business cycle. We characterize the transmission of, and spillovers from, monetary policy shocks in this environment. (JEL E52, F14, F31, F44)

Comment on “Trade integration in Colombia: A dynamic general equilibrium study with new exporter dynamics”

This paper provides a series of comments aimed mainly at addressing the empirical relevance of the proposed interpretation of the mechanism and partly at considering the possible interaction between the trade and labor market reforms that took place in Colombia in the same period. In particular, it first highlights the stylized facts about Colombian exports and exporters that the model aims to theoretically reconcile and I briefly summarize the mechanism proposed in the microeconomic block of the theory. Next, it focuses on two crucial assumptions made in the model; it proposes a complementary way of presenting the mechanism and proposes ways to evaluate the empirical relevance on the competing interpretations. Finally, it focuses on the broader economic and institutional background characterizing Colombia in the early Nineties and highlights the possibility that other reforms taking place in the same years may have interacted with trade liberalization in shaping firms' distribution and export dynamics as well as welfare.

Las realidades mineras impulsan el comercio internacional. El caso de Colombia (2008-2017)

El artículo intenta probar la hipótesis de que el sector minero colombiano ha impulsado la economía internacional hasta el punto de que ningún otro sector estaría en capacidad de emularla, al menos en el corto plazo. Las discusiones que califican la minería como una especie de “enfermedad nacional” suelen carecer de datos. En consecuencia, en este artículo se presenta y se analiza una serie estadística sobre las exportaciones e importaciones colombianas, según sectores CIIU, en el lapso 2008-2017; asimismo, se realiza un análisis cruzado de ambas eries, buscando precisar el impacto de la minería sobre la dinámica del comercio internacional colombiano; y finalmente se emiten algunas conclusiones y recomendaciones. La metodología es descriptiva-explicativa. Los resultados permiten probar la hipótesis e indicarían cómo el crecimiento intersectorial desigual es una realidad económica, lo que pone en duda, desde el enfoque minero, algunas de las críticas que rodean la dinámica del sector en Colombia.

Alternativa de financiación basada en titularización para la producción de plátano en el Urabá antioqueño

Los procesos de globalización a los que se enfrenta el sector agropecuario en Colombia conllevan una etapa de reestructuración para ser más competitivos y llegar a nuevos mercados, dado que los consumidores hoy en día son cada vez más informados y exigentes en cuanto a la calidad esperada de los productos. Esto lleva a que las empresas sean más eficientes e innovadores en los procesos de producción y comercialización, así como en la diversificación de sus portafolios de productos y mercados. Sin lugar a duda, éste es uno de los mayores desafíos enfrentados por el sector agro en Colombia y para ello se requiere un incremento de las tasas actuales de inversión, favoreciendo el impulso tecnológico y ofreciendo atención prioritaria a la búsqueda y adopción de nuevas alternativas de financiación. En este artículo se resalta el potencial de Colombia en la producción de plátano y se hace énfasis en la necesidad de contar con mecanismos innovadores de financiación para afrontar los problemas actuales de escasez de recursos económicos. Para ello se propone la financiación de productores de plátano a través de la Titularización, con el fin de fortalecer la competitividad del sector y poder aumentar su participación en las exportaciones colombianas.

Colombian Export Capabilities: Building the Firms-Products Network.

In this paper, we analyse the bipartite Colombian firms-products network, throughout a period of five years, from 2010 to 2014. Our analysis depicts a strongly modular system, with several groups of firms specializing in the export of specific categories of products. These clusters have been detected by running the bipartite variant of the traditional modularity maximization, revealing a bi-modular structure. Interestingly, this finding is refined by applying a recently proposed algorithm for projecting bipartite networks on the layer of interest and, then, running the Louvain algorithm on the resulting monopartite representations. Important structural differences emerge upon comparing the Colombian firms-products network with the World Trade Web, in particular, the bipartite representation of the latter is not characterized by a similar block-structure, as the modularity maximization fails in revealing (bipartite) nodes clusters. This points out that economic systems behave differently at different scales: while countries tend to diversify their production—potentially exporting a large number of different products—firms specialize in exporting (substantially very limited) baskets of basically homogeneous products.

Economic Impacts of El Niio Southern Oscillation: Evidence from the Colombian Coffee Market

El Nino Southern Oscillation (ENSO) is a naturally occurring phenomenon that affects weather around the world. Past ENSO episodes have had severe impacts on the economy of Colombia. We study the influence of ENSO on Colombian coffee production, exports, and price. Our structural econometric specification is consistent with an economic model of the market for Colombian coffee which, in the short run, is characterized by a downward-sloping demand curve and by a vertical supply curve. We show that El Nino (i.e., positive shocks to ENSO) is beneficial for Colombian production and exports and decreases the real price of Colombian coffee. On the contrary, La Nina (i.e., negative shocks to ENSO) depresses Colombian coffee production and exports and increases price. However, the overall impact of ENSO shocks is small. Both in the short run and in the long run, shocks to international demand for Colombian coffee are more relevant than supply-side shocks in Colombia in explaining the dynamics of the price of Colombian coffee. Our results suggest that a given coffee price shock can have beneficial, detrimental, or negligible effects on the Colombian economy, depending on its underlying cause. As a consequence, policy responses to coffee price shocks should be designed by looking at the causes of the shocks.

Does the sequencing of related and unrelated export diversification matter? Evidence from Colombian exporters

How does related or unrelated geographic diversification affect future related or unrelated product diversification of exporting firms, and vice-versa? This question addresses an unresolved debate, and it is important for firms in developing countries that seek to expand their product and geographical markets. Our study contributes to a current debate by highlighting the relevance of the temporal sequence and the relatedness of international diversification. Expanding the classic transaction costs and the resource-based explanations, we argue that organizational learning as well as organizational and sales (in-)efficiencies (notably through resource and product cannibalization, negative transfer and coordination costs) affect the interrelationships between product and geographic diversification. Using a panel dataset of over 14,000 firm-year observations from exporters based in Colombia, we find that (1) related geographic diversification tends to increase future product diversification; (2) related product diversification tends to decrease future geographic diversification; and (3) unrelated product diversification tends to increase future geographic diversification.

Preliminary evaluation of associated viruses in production systems of cape gooseberry, purple passion fruit, and rose

Plant viruses may pose a threat to crops in Colombia. To evaluate the potential risk of yield losses due to plant virus infection, a literature analysis followed by a first field study was carried out focusing on purple passion fruit (Passiflora edulis Sims), cape gooseberry (Physalis peruviana L.), and ornamental rose (Rosa sp.), which are important Colombian exports. Over the past three years, plant material was collected from 21 farms in Cundinamarca and Boyacá, Colombia, two regions that are in close proximity to El Dorado International Airport, the country’s largest air freight terminal. Plants were visually inspected and subsequently tested by bioassay and serological methods. Overall, in the samples investigated by the two diagnostic methods, plant viruses were detected. Detected viruses belong to the genus Poty-, Tobamo-, Nepo-, Ilar-, and Tospovirus. The extent of the distribution and occurrence of these viruses in each crop has to be determined in a representative field study. Such a monitoring program could be supported by a standardized farmer interview. The development of suitable plant virus diagnostic and managements tools is the focus of a cooperation project between German and Colombian universities, the Colombian Agricultural Institute (ICA), the Colombian Corporation of Agricultural Investigation (AGROSAVIA) and the International Center for Tropical Agriculture (CIAT).

Modelling with joint choice of ports and countries of origin and destination: application to Colombian ports

ABSTRACTLiterature has focused on studying port choice independently or as an element of a supply chain without considering the joint selection with the country of origin/destination of the imports/exports. However, the characteristics and location of a port may make it more attractive to mobilise more freight from/to some particular countries rather than others, making the port choice decision dependent on the country of origin/destination of the cargo. This article proposes advanced econometric models to evaluate simultaneously port choice and the country of origin/destination choice for Colombian imports and exports. Findings suggest that for imports and exports domestic freight rate is the most important variable for the joint choice process. Also, for exports, maritime transit time is more relevant than for imports, while for the frequency of shipping lines the opposite is true. The existence of a trade agreement and the gross domestic product per capita also have a significant influence on the election of a country for exports/imports.