Drivers of Spain’s Export Performance and the Role of the Labor Market Reforms
IMF Working Papers, December 13, 2018
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- Drivers of Spain’s Export Performance and the Role of the Labor Market Reforms
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Bibliographic details
- Authors: Jorge Salas
- Published: December 13, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484386941.001
Overview
- Spain’s export performance strengthened after the global financial crisis.
- Exports now represent more than a third of GDP.
- The paper identifies multiple contributing factors: external demand, greater diversification of destination markets, enhanced export orientation of Spanish firms, and competitiveness gains linked in part to labor market reforms.
Key drivers of export growth
- External demand, supported by greater diversification of destination markets.
- Enhanced export orientation of Spanish firms, partly as a response to lower domestic demand after the crisis.
- Competitiveness gains reflecting in part changes in the labor market following structural reforms adopted in 2010 and 2012.
Role of labor market reforms
- The analysis links real export growth to employment protection indicators using cross-country panel regressions.
- Labor market reforms adopted in 2010 and 2012 are a central focus for explaining competitiveness gains.
Empirical findings
- Based on cross-country panel regressions linking real export growth to employment protection indicators, those labor market reforms are estimated to account for nearly one-tenth to above one-quarter of Spain’s total export growth rate from 2010 to 2013.
Methodology note
- Empirical approach: cross-country panel regressions relating real export growth to employment protection indicators.
Policy implications and interpretation
- Labor market flexibility measures (as embodied in the 2010 and 2012 reforms) contributed materially to export growth, alongside demand-side factors and firm-level adjustments to weaker domestic demand.
- The paper attributes a nontrivial share of export performance improvement to labor market policy changes, implying that structural labor reforms can be an important component of competitiveness strategies.
Source: Jorge Salas, "Drivers of Spain’s Export Performance and the Role of the Labor Market Reforms", IMF Working Papers No. 2018/283 (December 13, 2018).
Content in this bundle
- Drivers of Spain’s Export Performance and the Role of Labor Market Reforms, WP/18/283, December 2018