PRODUCTIVE SPECIALIZATION, EMPLOYMENT AND TRADE STRUCTURE: AN ANALYSIS FOR COLOMBIAN DEPARTMENTS IN THE LAST THREE DECADES OF GLOBALIZATION

Abstract

Trade liberalization has been used extensively to promote regional competitiveness, productive specialization and employment. However, despite more than three decades of globalization and economic reforms, Colombia continues to experience significant regional disparities and a commercial system that is marked by the heavy reliance on the exportation of primary commodities. Hence, it makes one wonder whether the process of trade liberalization has truly fostered productive specialization and employment creation throughout Colombia's 32 departments. Consequently, this paper aims at establishing the connection between productive specialization, commercial system and employment creation within Colombia's 32 departments over the years 2002, 2012 and 2018. The study uses secondary data from the National Administrative Department of Statistics (DANE-GEIH) and employs the Location Quotient (LQ), Geographic Association Coefficient (GAC) and Employment Multiplier (EM). Also, regions that were very specialized were not necessarily those generating more employment, which suggests that the quality of specialization rather than the quantity matters. This paper makes an addition to the body of knowledge by bringing together the concepts of productive specialization, economic structure, and employment in a coherent regional framework, thus presenting findings on the differential territorial effects of globalization and policy implications for productive diversification and competitiveness in Colombia.