Olarreaga, MarceloLederman, DanielPerry, Guillermo E.2012-03-192012-03-192009978-0-8213-7308-8https://hdl.handle.net/10986/2591China's and India's fast economic growth since 1990 is paralleled only by their growing presence in policy discussions throughout the Latin America and the Caribbean (LAC) region. The success of these Asian countries is looked upon with admiration, but there is also concern about the effects that growing Chinese and Indian exports may have on the manufacturing and service sectors throughout LAC. Blame for the private sector's poor performance in some LAC countries often falls on the growing presence of China, and to a lesser extent India, in world markets. The rest of this introduction is organized as follows: the next section summarizes the evidence on the positive aggregate effects of China's and India's growth in world trade markets, foreign direct investment (FDI) flows, and innovation activities on LAC economies, and is followed by a section presenting evidence on the effects of China's and India's growth within industries, concluding that negative effects are limited to certain manufacturing and service sectors, in particular in Mexico and to a lesser extent in Central America and the Caribbean. Next is a section that summarizes evidence of the effects of China's and India's growth on specialization patterns and factor adjustments, and actual and potential policy responses by LAC governments. The final section summarizes policy implications.CC BY 3.0 IGOACCUMULATION OF RESERVESADJUSTMENT COSTSANTIDUMPINGANTIDUMPING CASESANTIDUMPING DUTIESAPPARELAPPAREL INDUSTRIESAPPAREL INDUSTRYASSETSBILATERAL AGREEMENTSBILATERAL COOPERATIONBILATERAL TRADEBUSINESS CYCLEBUSINESS CYCLE SYNCHRONIZATIONBUSINESS CYCLESCAPITAL FLOWSCAPITAL MARKETSCAPITAL OUTFLOWSCAPITAL STOCKCAPITAL STOCKSCENTRAL BANKCOMMODITIESCOMMODITY PRICECOMMODITY PRICESCOMPARATIVE ADVANTAGECOMPETITIVENESSCONSTANT ELASTICITY OF SUBSTITUTIONCONSUMER PREFERENCESCONSUMERSCOPYRIGHT CLEARANCECOPYRIGHT CLEARANCE CENTERCORPORATE GOVERNANCECORRELATION ANALYSISCORRELATION COEFFICIENTCORRELATION OF BUSINESS CYCLESCOUNTRY DUMMIESCOUNTRY ECONOMYDEMAND SHOCKSDEPENDENT VARIABLEDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICIESDOMESTIC MARKETSDOMESTIC PRODUCERSECONOMETRIC MODELECONOMIC COOPERATIONECONOMIC GROWTHECONOMIC POLICIESECONOMIC POLICYECONOMIC RELATIONSECONOMIC RESEARCHECONOMIC SIZEECONOMICSECONOMICS RESEARCHELASTICITYELASTICITY OF SUBSTITUTIONEXPLANATORY VARIABLEEXPORT GROWTHEXPORT MARKETEXPORT PRICESEXPORT SPECIALIZATIONEXPORT SUPPLYEXPORT VOLUMEEXPORTEREXPORTERSEXPORTSEXPOSUREEXTERNALITIESFACTOR ENDOWMENTSFACTORS OF PRODUCTIONFEDERAL RESERVEFINANCIAL SECTORFISCAL POLICYFOREIGN ASSETFOREIGN ASSET HOLDINGSFOREIGN CAPITALFOREIGN DIRECT INVESTMENTFOREIGN INVESTMENTFOREIGN RELATIONSFREE TRADEFREE TRADE AGREEMENTFREE TRADE AREAGDPGDP PER CAPITAGENERAL AGREEMENT ON TARIFFSGENERAL EQUILIBRIUMGEOGRAPHIC PROXIMITYGLOBAL COMPETITIONGLOBAL ECONOMYGLOBAL LIQUIDITYGLOBAL MARKETPLACEGLOBAL MARKETSGLOBALIZATIONGRAVITY MODELGROSS DOMESTIC PRODUCTGROSS DOMESTIC PRODUCT PER CAPITAHUMAN CAPITALIMPACT OF TRADEIMPORT COMPETITIONIMPORT DATAIMPORT DEMANDIMPORT MARKETSIMPORT PENETRATIONIMPORT PRICEIMPORT PRICESIMPORT TARIFFSIMPORTSINCOME LEVELSINDUSTRIAL PRODUCTIONINDUSTRIAL SECTORINDUSTRY TRADEINEQUALITYINSTRUMENTAL VARIABLESINTERMEDIATE GOODSINTERNATIONAL ECONOMICSINTERNATIONAL FINANCEINTERNATIONAL INTERESTINTERNATIONAL INTEREST RATESINTERNATIONAL MARKETSINTERNATIONAL STANDARDINTERNATIONAL TRADEINTERNATIONAL TRADE COMMISSIONINVESTMENT CLIMATEINVESTMENT OPPORTUNITIESINVESTOR PROTECTIONJOB CREATIONLABOR FORCELABOR MARKETSLIQUIDITYLOBBYINGMACROECONOMIC VULNERABILITYMACROECONOMICSMARKET SHAREMARKET SHARESMONOPOLISTIC COMPETITIONMULTINATIONAL ENTERPRISESMULTINATIONAL FIRMSNATURAL RESOURCENATURAL RESOURCESNET EXPORTERNET EXPORTSOPEN ECONOMYOUTPUTPATENTSPOLITICAL ECONOMYPOSITIVE EXTERNALITIESPREFERENTIAL ACCESSPREFERENTIAL TARIFFSPREFERENTIAL TRADEPRICE INDEXESPRIMARY COMMODITYPRIVATE CAPITALPRIVATIZATIONPRODUCTION STRUCTURESPRODUCTIVITYPROTECTIONISMPROTECTIONISTPUBLIC DEFICITSQUOTASRAPID GROWTHREGIONAL TRADEREGIONAL TRADE AGREEMENTSREGRESSION ANALYSISRELATIVE PRICESREMITTANCESRESERVE BANKSAFETY NETSSHARE OF WORLD EXPORTSSIDE EFFECTSSLOWDOWNSOCIAL DEVELOPMENTSPECIALIZATIONSUGAR PRICESSUPPLY CAPACITIESSUPPLY CAPACITYSUPPLY CONDITIONSSUPPLY SHOCKSSUPPLY SIDESSUPPLY-SIDESURPLUSESTELECOMMUNICATIONSTERMS-OF-TRADE GAINSTOTAL EXPORTSTOTAL FACTOR PRODUCTIVITYTOTAL IMPORTTOURISMTRADE BALANCETRADE CLASSIFICATIONTRADE COSTSTRADE DATATRADE FLOWSTRADE IN GOODSTRADE IN SERVICESTRADE INTEGRATIONTRADE LIBERALIZATIONTRADE POLICIESTRADE RELATIONSHIPSTRADE SHOCKSTRADE STATISTICSTRADEMARKSTRADING PARTNERSUNEMPLOYMENTUNSKILLED LABORVALUE ADDEDWAGESWEALTHWORLD DEMANDWORLD DEVELOPMENT INDICATORSWORLD MARKETSWORLD PRICEWORLD TRADEWORLD TRADE ORGANIZATIONWTOWorld Bank10.1596/978-0-8213-7308-8