4 research outputs found

    Stimulating Non‐Energy Exports in Trinidad and Tobago: Evidence from a Small Petroleum‐Exporting Economy Experiencing the Dutch Disease

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    The motivation for this study hinges around the fact that Trinidad and Tobago (T&T) is suffering from the Dutch disease which inadvertently hinders the growth of non-energy exports. This paper examines measures that can be adopted for a small petroleum-exporting economy to dampen the effect of Dutch disease by promoting non-energy trade. This paper is novel and contributes to the literature in using panel data for the T&T case, as it investigates the effect of a devaluation of the TT dollar in order to stimulate non-energy exports (a combination of agriculture and manufacturing trade). Note that previous studies would have examined the Marshall–Lerner condition on the aggregate trade balance which is heavily influenced by energy revenues. The panel autoregressive distributed lag (ARDL) method is used for ten of T&T’s main trading partners for the period 1991 to 2019 to establish findings. The results show that the Marshall–Lerner condition does not hold for aggregate trade in the long run, as expected. However, when non-energy trade is isolated, it is found that a devaluation of the TT dollar does have a positive impact on non-energy trade and the Marshall–Lerner condition holds. Other measures are also recommended to stimulate non-energy exports in the long run

    The impact of Spanish immigrants on the Trinidad and Tobago’s economy: can Spanish as a second language promote trade?

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    This paper examines the extent to which having Spanish as a second language influences trade in Trinidad and Tobago (T&T). Our study is motivated by the inflow of Venezuelan migrants into T&T on account of political and economic tensions in Venezuela. This influx of immigrants can positively impact the T&T economy using the Rybczynski theorem. This is necessary given that the country faces an aging population and a decline in trade with traditional trade partners. Gravity modelling including Pooled OLS, Fixed Effects Model, Random Effects Model and the Poisson-Pseudo Maximum Likelihood method are used to examine whether language affects T&T’s extra-regional trade with Spanish speaking countries. It is determined that language is a significant factor in promoting trade in T&T, increasing bilateral trade and exports. The impact of Spanish immigrants on the T&T economy reduces the loss of exports as compared to if Spanish immigrants were absent. We suggest an intensification of the adoption of Spanish as a second language in T&T in order to promote trade with other Spanish speaking countries as it would reduce communication costs

    Trade Complementarity as a Basis for the Natural Trading Partner Hypothesis: A Panel Data Study for Trinidad and Tobago

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    This article examines trade complementarity as a basis for the natural trading partner hypothesis from a sectoral view of trade for the petroleum-based economy of Trinidad and Tobago (T&T) over the period of 2000 to 2015. Gravity modeling and an Intercountries Trade Force (ITF) model are adopted to determine the nature of sectoral trade complementarities in T&T over time. The results shows that trade complementarity and manufacturing trade complementarity significantly contribute to trade for T&T, which is important when choosing trade partners. This provides incentives for manufacturing which can dampen the effect of the Dutch Disease

    Determining Factors of FDI Flows to Selected Caribbean Countries

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    Foreign direct investment (FDI) is a vital ingredient in achieving sustained growth in the Caribbean region. However, FDI inflows have been affected by issues such as market factors, trade barriers, costs factors, investment climate, political and foreign exchange stability. To this end, this paper examines the factors affecting FDI flows into Caribbean countries. We argue that Small Island Developing States in the Caribbean (SIDSC) can be affected by issues such as their small market size, high cost of energy, proneness to exogenous shocks from commodity prices, natural disasters and climate change. A point to note is that countries in the Caribbean with natural resources are expected to have biased FDI inflows. Additionally, countries throughout the Caribbean have different economic and productive structures and unique issues that can affect them based on their individual characteristics. To this end, a panel Autoregressive Distributed Lagged (ARDL) model is used to determine the factors affecting FDI inflows in the Caribbean over the period 2000 to 2019. The findings reveal that GDP growth, natural resource rents, gross capital formation and population growth are significant factors influencing growth in the Caribbean region
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