Measuring the Impact of Glocalization Strategy on Panama’s Economic Performance

Abstract

In order for a country to achieve its maximum economic development potential, it is imperative to study the factors that have greater influence in the economy, in order to determine the appropriate strategies to adopt. The purpose of the present study was to determine the factors having greater influence on Panama’s economic development. Panama is a country with different evolution and development from other Latin American countries and this difference involves the implementation of specific strategies regarding determined domestic dimension, international dimension and institutional dimension. Determining the best strategy for Panama to adopt, could bring a better economic development and a clear vision of the possible strategies to improve international relationships. In order to accomplish this objective, a macro economical analysis of the institutional changes between 1980 and 2006, focusing special attention to 1999 and 2001, and the factors that influenced on the economic development of Panama. While several factors are associated with a country’s economic development, this research explores domestic dimension (agriculture, manufacture, and service), international dimension (net trade balance with United States, Europe, Asia, Africa, and Oceania), and Institutional dimension (Panama Canal ownership before and after year 2000, and 9/11 economic shock), effect on unemployment rate, inflation rate, and misery rate. Different authors explain Panama’s economic performance regarding unemployment rate and inflation rate. However, these studies focus Panama’s economic development taking in consideration domestic factors, international factors, and institutional factors that have effect on Panama’s economic development. Therefore, in order to measure the impact of Panama’s this factors on Panama’s economic development, an econometric model was first built by Tony Shih. The empirical results show statistically significant differences, and highly important results.