The impact of the Panama Canal transfer on the Panamanian economy

• Published in: Economics letters Vol. 211; p. 110208
• Main Author: Fuentes Cordoba, Gabriel
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01-02-2022; Elsevier Science Ltd
• Subjects: Development; Economic development; GDP; Gross Domestic Product; Impact analysis; Panama; Synthetic control; Panama; F63; O47; Synthetic control; Panama; Development; O54; O10
• ISSN: 0165-1765; 1873-7374
• DOI: 10.1016/j.econlet.2021.110208

Panama received full administration of the Panama Canal in December 31st of 1999. Using the synthetic control method, I quantify the effect of this transfer on per capita GDP in Panama. The findings suggest that the transfer had a small positive effect in the short-run and a large positive effect in the mid- and long-run. However, the long-run effect may be overestimated due to the expansion of the Panama Canal.
•I estimate the impact of the transfer of the Panama Canal on Panama’s per capita GDP.•I use the synthetic control method for comparative case studies.•There is a small effect on per capita GDP in the first years after the transfer.•The estimated effect of the transfer is larger in the mid- and long-run.