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Article
Peer-Review Record

Latin America and the Caribbean’s Productivity: The Role of Pro-Market Policies, Institutions, Infrastructure, and Natural Resource Endowments

Economies 2023, 11(5), 142; https://doi.org/10.3390/economies11050142
by Néstor Le Clech 1,* and Juan Carlos Guevara-Pérez 2
Reviewer 1:
Reviewer 2: Anonymous
Reviewer 3: Anonymous
Economies 2023, 11(5), 142; https://doi.org/10.3390/economies11050142
Submission received: 16 March 2023 / Revised: 3 May 2023 / Accepted: 6 May 2023 / Published: 10 May 2023
(This article belongs to the Special Issue Nexus between Politics and Economics in the Emerging Countries - II)

Round 1

Reviewer 1 Report

The article examines the influence of various factors, including institutions, on the total factor productivity (TFP).

 

In general, I like the article, the approach is well supported by the literature review, the results are properly explained.

Some minor changes may improve the article.

1. I would suggest comparing the author's TFP metric with another approach that is used in the PennWorld table or in the Total Economy database.

2. The 20 countries of the LAC region are heterogeneous. The TFP index varies greatly. The author(s) use the grouped-mean FMOLS, which is correct to the best of my knowledge. But I would suggest explaining the benefit of this approach in more detail.

Some minor comments are made in the text

 

Comments for author File: Comments.pdf

Author Response

Dear reviewer,

In the attached document we respond to your observations.

Thank you very much for your suggestions.

Kind regards,

The authors

Author Response File: Author Response.pdf

Reviewer 2 Report

I read your manuscript with great interest. I congratulate you for the good work done on the important topic of investigating the causes for productivity change in various regions of the world, which in your case are the Latin American and Caribbean countries (LAC).

I have a few you suggestions for improving the paper. You have made a decision to test your hypothesis with nine statistical models. The difference of these models is that one of the independent variables, Policy varies between the models. This is an odd solution, since you could have easily included all the nine policy variables in a single model. There is some variation between the models' results and it is not clear how much of that variation can be attributed to the omitted variable bias (i.e. leaving out the other eight policy variables). You should consider revising the estimations so that all (or a non-overlapping selection of) the policy variables are included in the model.

Another issue is the result on natural resources, which shows a positive relationship between productivity and natural resource use. However, it is not clear what is driving this result as the variable NatRes is "an index that measures the availability of extractive and agricultural resources". What are included in agricultural resources? How large share that is for each country? Without that information, you cannot draw a conclusion that the resource curse is really reversed in the LAC countries.

Also, the positive coefficient for Tariffs (and MTR) merits a further scrutiny. You claim that the positive coefficient value gives support for more liberal trade policies. But based on the description of the variable described in Table 1, the opposite seems more logical: the positive coefficient value means higher tariff rates yield a higher productivity. Nevertheless, the omitted variable bias to which I alluded to earlier, could have something to do with this result too.

Here are few more stylistic suggestions:

Subsection 3.1. could be considered to be either moved to an appendix or you could restructure the section 3 more completely: e.g. first describe the model briefly, then in 3.1. describe the TFP estimation (dependent variable) and then in 3.2. describe the independent variables.

Lines 598-604. Based on this insight, could you think about any control variables for structural changes in labour markets. As you point out that it is likely to be a major driver, you should somehow control that in the model.

On lines 625-627, the sentence "However, it does not mean..." There really isn't anything to support this claim in your results. How can you state that transport infrastructure needs to be improved if your results do not show any conclusive effects on productivity? (This also might boil down to the model formulation.)

All things considered, I'm proposing you to make a major revision in your work.

Author Response

Dear reviewer,

In the attached document we respond to your observations.

Thank you very much for your suggestions.

Kind regards,

The authors

Author Response File: Author Response.pdf

Reviewer 3 Report

The topic of the article is very interesting and, above all, important. The research has a comprehensive theoretical foundation. The methodology is clear, correct. Research results very well presented. Structure of the article logical and complete. Only the list of bibliographies should be improved in accordance with the guidelines of the journal.

Author Response

Dear reviewer,

In the attached document we respond to your observations.

Thank you very much for your suggestions.

Kind regards,

The authors

Author Response File: Author Response.pdf

Round 2

Reviewer 2 Report

I want to thank the authors for carefully considering the concerns I expressed over the paper. I am satisfied with their reply. Some of the concerns I expressed were not well-founded and the authors well explained their position. And the concerns that were well-founded, the authors made appropriate corrections. The quality of the paper is improved and I suggested that it should be published.

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