Prepared by Marcio Ronci, Marcelo Sanchez, and Erik Offerdal.
The other countries in the sample are: Argentina, Bolivia, Brazil, Chile, Colombia, Peru, and Venezuela.
The analysis could not be carried beyond 1993 because of lack of reliable data on capital stocks after this date.
The oil sector is defined to include all of division 2 in the ISIC classification; it thus corresponds to the mining sector. In Ecuador, division 2’s dominant components are crude oil and gas; it also includes refining of petroleum and other mining.
The test for cointegration is based on the OLS coefficient of the lagged dependent variable in an autoregressive distributed lagged model (eventually) augmented with leads of the regressors. For an application of this modeling strategy, see Belke and Golke (1996).
Series of TFP growth in both of the sectors were estimated by subtracting a weighted sum of factor inputs from GDP growth, using as weights the factor share estimated in the regressions in Tables II.2a and II.2b. The TFP series were then smoothed using a Hodrick-Prescott filter.
Since it is possible to find the presence of structural breaks during the sample period, we have tested for stability of the estimating equations as well as tried several step and impulse dummies.