Brazil

The automotive sector is one of the sectors in which trade between mercosur countries has grown most strongly. This article examines the possibility that trade diversion occurred in that sector during the period 1991-2010, assuming that product costs fell as a result of market expansion. The analysis is based on the concepts of “cost reduction” and “trade suppression” coined by Corden (1972), which capture the effects of economies of scale. Indices of regional orientation and revealed comparative advantages are used in combination to assess whether the trade bloc is evolving in line with comparative advantages. The results suggest efficiency gains for automotive-sector products, exports of which from Brazil to mercosur grew more vigorously because the expanded and relatively protected market made it possible to exploit the economies of scale that are characteristic of the automotive industry.

This article analyses productivity trends in Brazilian and Mexican manufacturing industries between 1995 and 2009, a period in which international competition intensified sharply. A total of 14 manufacturing industries are considered, using two methods based on: (i) the Leontief (1951) model to measure the consumption of intermediate goods used in production; and (ii) the analysis of total factor productivity (tfp). The studies performed show that manufacturing trends have diverged in the two countries. In Mexico, an increased need for imported goods and services was offset by a reduction in domestic goods and service requirements, and an increase in the tfp of production. In the case of Brazil, the fact that manufactured goods markets are more isolated from foreign trade seems to have contributed to a weak productivity performance.

This article aims to analyse the determinants of foreign direct investment (FDI) into Brazil between 2001 and 2013. It uses a vector error correction (VEC) model to analyse both the long-term function and the impulse-response function. The results show that levels of economic activity, wages and productivity are positively related to FDI inflows, which means that investors pursue market-seeking and efficiency-seeking strategies when targeting the Brazilian market. Although less important, the stability of the national economy and the exchange rate also proved statistically significant in explaining FDI inflows.

We use panel data for Brazilian states from 1995 to 2009 to analyse the impact of economic growth and income inequality on poverty change in Brazil, seeking to evaluate the Bourguignon (2003) hypothesis that the more unequal a country is, the less effective economic growth will be at reducing poverty. To this end, we estimate poverty elasticities relative to income and inequality, specifying two dynamic econometric models estimated via the generalized method of moments (GMM) system developed by Arellano and Bond (1991), Arellano and Bover (1995) and Blundell and Bond (1998). The model-estimated results prompt the conclusion that the income growth effect on poverty reduction is smaller when the initial development level is low. The same is found when the initial inequality level is high. Therefore, regions with a low initial development level, high initial inequality or both present less favourable conditions for reducing poverty through income growth.

This paper uses the product space methodology to gain new perspectives on the relationship between economic complexity and economic development, illustrated by case studies of Brazil and the Republic of Korea. It takes import data as an indicator of revealed comparative disadvantage to highlight the relevance of the local market. Product space networks for each decade between 1960 and 2000 are then presented, revealing the significant changes in each country’s position in the international division of labour. Lastly, a structural development index is used to measure economic development in each country. The revealed comparative advantage and disadvantage indices indicate that while both countries had similar levels of per capita gross domestic product (GDP) in the early 1960s, the Republic of Korea saw faster growth than Brazil thanks to its early specialization in more complex, technology-intensive goods.

This article attempts to explain how the innovation process is determined by factors external to the firm, whose productivity is calculated and analysed in terms of systemic innovation factors. To that end, it describes the internal innovation capabilities of firms, which explain variations in their productivity across sectors. The productivity of manufacturing firms is constructed using the Abramovitz residual method (social accounting), referred to as total factor productivity (tfp), or the Solow residual. Nonetheless, a number of theoretical problems are avoided, such as the effect of scale, aggregation and the heterogeneity of the factors considered in the model. The tfp of Brazilian manufacturing firms is explained by their internal capabilities and by product innovation in the sector to which they belong, which shows that innovation depends on institutions located within the industry.

This article analyses the production relocation strategies deployed by firms in the Vale do Sinos footwear cluster in Rio Grande do Sul, in response to competitive pressures from other parts of the world, mainly Asia. The hypothesis proposed here is that, as the sector competes mainly in terms of product price, the factors that most directly influence that variable —such as wages, the exchange rate and tax and financial incentives— have affected the industry’s spatial distribution. The study’s main conclusions are that, since 1990, footwear production has been migrating to other parts of Brazil and firms have been seeking other sources of competitiveness.

This article analyses the structure of Brazilian and Chinese exports to Latin American markets, for the purpose of evaluating the repercussions of China’s emergence as a global power and major trading partner of the countries of the region. An estimation of several international trade and competitiveness indicators shows that Chinese exports, particularly manufactured goods, are displacing Brazilian products on the regional market; and this poses a potential threat to Brazil.

This article, based on Kaldor’s model of the stages of development, concludes that, despite having modernized thanks to the economic liberalization process, the evolution of Brazil’s industrial structure has increased the share of low-technology goods in the production matrix. The trend appreciation of the real in the initial phase of economic liberalization was positive for modernizing Brazil’s technology stock; but its continuation in recent years, when there has been ample international liquidity for emerging countries, threatens the development of the national manufacturing sector. This sector could suffer a technological setback, which, according to the principle of circular cumulative causation, diminishes its capacity to forge links with other sectors of activity, and accentuates the economy’s long-term external dependency.

This study analyses the impact of economic growth and income inequality on poverty in Brazil in the years from 1981 to 2013. A dynamic panel model was used, estimated by the twostep generalized method-of-moments system developed by Blundell-Bond (1998), in order to analyse three scenarios: the first corresponds to the entire period covered by this study (i.e. 1981-2013); the second encompasses the years from 1981 to 1994 (the period leading up to the Real Plan); and the third is the period from 1995 to 2013 (the years following the implementation of the Real Plan). The results indicate that economic growth policies that promote an increase in income in conjunction with a reduction in income disparities are more effective in combating poverty in Brazil than those that focus only on raising mean income levels. The findings also point to the existence of a pro-poor form of growth in the period following the Real Plan.