CARIFORUM and UK EPA Study

and communication technology (ICT), institutions, private sector, and structural change [ Description of the components is required].

We find variations in the contributions of the micro components to the overall performance of productive capacity in the CARIFORUM countries. Structural change drives productive capacity only in the UK and St. Vincent. Transportation is more important for increased productive capacity in the Bahamas and Belize. Institutions are more important in Barbados, Dominica, DR, Guyana, and St. Lucia. ICT contributes to productive capacity in Trinidad and Tobago and Grenada. However, to varying degrees, human capital shows a positive association with the composite index for all the countries in the sample. The variables (components) with negative coefficients make no significant contributions to the overall index, and they could diminish the importance of the overall index in trade regressions that are country specific. This possibility is not unusual when indices are utilized in regression models. Productive Capacity Index (Covariance Matrix) Bahamas Barbados Belize Dominica DR Grenada Overall index: 0.153 0.117 1.395 0.076 0.416 0.348 Human capital 0.074 -0.082 0.652 0.017 0.255 0.294 Natural capital -0.001 0.099 -0.460 0.020 -0.130 0.079 Energy -0.265 0.290 -0.855 0.120 0.203 -0.329 Transport 0.691 0.311 15.137 0.051 -0.045 0.434 ICT 0.519 -0.249 0.592 0.090 0.799 0.745 Institutions -0.718 0.353 -2.045 0.131 1.255 0.326 Private sector -0.209 0.065 0.146 0.029 -0.105 0.505 Structural Change 0.007 0.182 -0.352 0.028 -0.264 -0.064

St Lucia 0.304 0.064

St. Vincent

Trinidad Tobago

Guyana Jamaica

Suriname

Overall index: Human capital

0.306 0.079

0.303 0.106

0.213 0.474

1.881 0.837

0.707 0.568

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