Manufacturing convergence in the Southern Cone: New evidence for the industrialization period

ABSTRACT The objective of this paper is, on the basis of new evidence, to contribute to the analysis of the performance of the manufacturing industries in Brazil, Chile, and Uruguay during the state-led industrialization period and in comparison with a developed country. Specifically, this paper estimates the productivity gap between Brazil, Chile, and Uruguay relative to the United States in order to reveal whether convergence took place at the industry level. The results identify changes within the industrial sector in the three Latin American countries. In short, manufacturing in Brazil achieved substantial changes, which were reflected in favourable structural change and manufacturing convergence. Moreover, manufacturing convergence accelerated in Brazil in the 1960s, when the development model based on industrialization deepened. Structural transformation was weak in Uruguay and mild in Chile, and the ability to reduce technological gaps was limited to industries based on natural resources with medium and high levels of industrial protection. The latter must also be linked to the different pace of industrialization in these two countries, especially in Uruguay, where the industrializing impulse was exhausted very early on.