Working Papers

Documents published in the IDB working paper series are of the highest academic and editorial quality and all have been peer reviewed by recognized experts in their field. They are research and survey studies that, while conforming to rigorous research standards, need not be final products as their purpose is not only to inform but to stimulate discussion. The audience for working papers is largely academic, but may also include policymakers and private sector professionals.

• A Cross-Country Analysis of the Risk Factors for Depression at the Micro and Macro Level

  Melgar, Natalia; Rossi, Maximo

  Date : Sep, 2010

  Past research has provided evidence of the role of some personal characteristics as risk factors for depression. However, few studies have examined jointly their specific impact and whether country characteristics change the probability of being depressed. In general, this is due to the use of single-country databases. The aim of this paper is to extend previous findings by employing a much larger dataset and including the country effects mentioned above. The paper estimates probit models with country effects and explores linkages between specific environmental factors and depression using data from the 2007 Gallup Public Opinion Poll. Findings indicate that depression is positively related to being a woman, adulthood, divorce, widowhood, unemployment and low income. Moreover, there is evidence of the significant positive association between inequality and depression, especially for those living in urban areas. Finally, some population’s characteristics facilitate depression (age distribution and religious affiliation).

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• What Determines Investment in the Oil Sector?

  A New Era for National and International Oil Companies

  Mercer-Blackman, Valerie Anne, Hvozdyk, Lyudmyla

  Date : Aug, 2010

  This paper discusses recent trends in investment in the oil sector, amid new challenges for national and international oil companies in an increasingly supply-constrained environment. After more than a decade of stagnant investment rates, nominal investment has picked up sharply over the three years ending in 2007, but soaring costs (including from higher tax rates and royalties) meant that investment growth was minimal in real terms. The paper performs econometric tests using the Arellano-Bond GMM technique. It finds that ‘below ground’ risks are statistically very important in deterring real investment. Companies are taking on increasingly complex geological challenges, which are putting upward pressure on production costs and are leading to greater project delays compared to the past. As many of these factors are expected to persist, supply constraints are likely to remain a dominant factor behind oil price fluctuations during the next several years.

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• Gender Earnings Gaps in the Caribbean: Evidence from Barbados and Jamaica

  Bellony, Annelle; Hoyos, Alejandro; Nopo, Hugo

  Date : Aug, 2010

  This paper analyzes gender earnings gaps in Barbados and Jamaica, using amatching comparisons approach. In both countries, as in most of the Caribbean region, females’ educational achievement is higher than that of males. Nonetheless, males’ earnings surpass those of their female peers. Depending on the set of control characteristics, males’ earnings surpass those of females by between 14 and 27 percent of average females’ wages in Barbados, and between 8 and 17 percent of average females’ wages in Jamaica. In the former, the highest earnings gaps are found among low-income workers. Results from both countries confirm a finding that has been recurrent with this matching approach: the complete elimination of gender occupational segregation in labor markets would increase rather than reduce gender earnings gaps. The evidence is mixed regarding segregation by economic sectors. Occupational experience, in the case of Barbados, and job tenure, in the case of Jamaica, help to explain existing gender earnings gaps.

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• The Role of Relative Price Volatility in the Efficiency of Investment Allocation

  Cavallo, Eduardo; Galindo, Arturo; Izquierdo, Alejandro; Leon, John Jairo

  Date : Aug, 2010

  This paper estimates the impact of relative price volatility on sector-level investment allocation using a panel of 65 countries with data for 26 manufacturing industries over the period 1985-2003. Results indicate that volatility distorts efficient investment allocation in that investment is not necessarily devoted to relatively more productive sectors, especially in emerging market economies that are highly exposed and may lack the necessary institutions to deal with it successfully. This is evidence in support of theories suggesting that relative price volatility provides incentives for entrepreneurs to adopt more “malleable” but less productive production technologies, enabling them to accommodate more easily abrupt and frequent changes in relative prices, but at the cost of using less productive technologies.

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• Export Promotion Organizations in Latin America and the Caribbean: An Institutional Portrait

  Date : Aug, 2010

  Virtually all Latin American and Caribbean countries have established specialized organizations to promote their exports. Existing analyses of these organizations are at best partial and fragmentary. This paper aims at overcoming these limitations of the literature by presenting a consistent, detailed organizational characterization of the major export promotion entities in their respective countries. This characterization is primarily based on data collected through an extensive survey that we have conducted among organizations in the region, and, to put them into an appropriate perspective, among relevant organizations from countries outside of the region.

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• The Impact of Export Promotion Institutions on Trade: Is It the Intensive or the Extensive Margin?

  Date : Aug, 2010

  This paper provides evidence on the channels through which export promotion institutions affect bilateral trade using a sample of Latin American and Caribbean countries over the period 1995-2004. We find that these institutions have a larger impact on the extensive margin of exports, especially in the case of trade promotion organizations.

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• Information Barriers, Export Promotion Institutions, and the Extensive Margin of Trade

  Date : Aug, 2010

  This paper assesses role played by export promotion institutions in shaping the extensive margin of Latin American and Caribbean countries’ exports over the period 1995-2004. We find that the presence of offices of export promotion agencies abroad favors an increase in the number of differentiated goods that are exported, whereas a larger number of diplomatic representations in the importer countries seem to be associated with exports of a larger number of homogeneous goods.

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• Is Export Promotion Effective in Developing Countries? Firm-Level Evidence on the Intensive and Extensive Margins

  Date : Aug, 2010

  How effective are export promotion activities in developing countries? What are the channels through which export promotion affects firms’ exports, the intensive margin or the extensive margin? Empirical evidence in this respect is scarce. We aim at filling this gap in the literature by providing evidence on the impact of export promotion on export performance using a unique firm-level dataset for Peru over the period 2001-2005. We find that export promotion actions are associated with increased exports, primarily along the extensive margin, both in terms of markets and products. This result is robust across alternative specifications and estimation methods.

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• Export Promotion Activities in Developing Countries: What kind of Trade Do They Promote?

  Date : Aug, 2010

  Information problems involved in trading differentiated goods are a priori acuter than those associated with trading more homogeneous products. The impact of export promotion activities intending to address these problems can be therefore expected to differ across goods with different degree of differentiation. Empirical evidence on this respect is virtually inexistent. This paper aims at filling this gap in the literature by providing estimates of the effect of these activities over firms trading different goods using highly disaggregated export data for the whole population of Costa Rican exporters over the period 2001-2006. We find that trade promotion actions favor an increase of exports along the extensive margin, in particular, in terms of destination countries, in the case of firms that are already selling differentiated goods. However, these actions do not seem to encourage exporter to start exporting these goods. Further, no significant impacts are observed for firms exporting reference-priced and homogeneous goods.

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• Beyond The Average Effects: The Distributional Impacts of Export Promotion Programs in Developing Countries

  Date : Aug, 2010

  Do all exporters benefit the same from export promotion programs? Surprisingly, not matter how obvious this question may a priori be when thinking of the effectiveness of these programs there is virtually no empirical evidence on how they affect export performance in different parts of the distribution of export outcomes. This paper aims at filling this gap in the literature. We assess the distributional impacts of trade promotion activities performing efficient semiparametric quantile treatment effect estimation on assistance, total sales, and highly disaggregated export data for the whole population of Chilean exporters over the period 2002-2006. We find that these activities have indeed heterogeneous effects over the distribution of export performance, along both the extensive and intensive margins. In particular, smaller firms as measured by their total exports seem to benefit more from export promotion actions.

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