The nexus between finance and manufactured exports in selected Caribbean and Central American countries

This study uncovers several surprising and unexpected policy insights that can help small Caribbean and Central American countries develop a strategy to diversify their export base. The results from causality tests of the nexus between financial development and manufactured exports, show that in 63% of a sample of eight countries, financial development causes manufactured exports and vice versa for the remaining 37%. These results are then used to explore in greater depth potential economy specific structural factors that explain the causality test findings in these countries.