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Strategies of Waste: Bidding Wars in the Brazilian Automobile Sector

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  • André Rodríguez-Pose

Abstract

Since the mid-1990s, Brazil has become one of the main recipients of foreign direct investment in the automobile sector. As in the late 1950s and early 1960s, world car manufacturers are investing heavily in the building of new car plants. The renewed interest of car companies in Brazil is a result of the huge and expanding internal market and the relatively stable macroeconomic panorama of the mid-1990s. However, and in contrast to what happened in the 1950s and 1960s, most new car plants are being located outside the S�o Paulo metropolitan area, the traditional hub of the Brazilian motor industry. Although some argue that, among other reasons, this is the result of lower labour costs elsewhere in Brazil and of improved infrastructure in the country, this article aims to demonstrate that the recent decentralization of the Brazilian motor industry is basically linked to perverse territorial competition among Brazilian states. This sort of territorial competition - known in Brazil as the 'fiscal wars'- represents a pure waste of resources, both for the states engaged in them, as well as for Brazil as a whole. Copyright Joint Editors and Blackwell Publishers Ltd 2001.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal International Journal of Urban and Regional Research.

Volume (Year): 25 (2001)
Issue (Month): 1 (03)
Pages: 134-154

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Handle: RePEc:bla:ijurrs:v:25:y:2001:i:1:p:134-154

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  1. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  2. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Fundamental," American Economic Review, American Economic Association, vol. 87(2), pages 184-88, May.
  3. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander W, 1997. "North-South R&D Spillovers," Economic Journal, Royal Economic Society, vol. 107(440), pages 134-49, January.
  4. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155, September.
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Cited by:
  1. van den Berghe, D., 2001. "The Geography of International Strategy: a multi-level framework," ERIM Report Series Research in Management ERS-2001-51-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  2. Filipe Lage-De-Sousa, 2006. "Trade Shocks in Brazil: An Investigation of Effects on Regional Manufacturing Wages," ERSA conference papers ersa06p441, European Regional Science Association.
  3. Filipe Lage de Sousa, 2010. "Regional Manufacturing Wages: Dancing to the Tune of Trade Shocks," SERC Discussion Papers 0046, Spatial Economics Research Centre, LSE.
  4. Metaxas, Theodore, 2004. "Οικονομική Ανάπτυξη, Ανταγωνιστικότητα Και Μάρκετινγκ Της Πόλης: Η Άποψη Των Επιχειρήσεων Της Πόλης Της Λάρι," MPRA Paper 43301, University Library of Munich, Germany.
  5. Josh Whitford & Aldo Enrietti, 2005. "Surviving the Fall of a King: The Regional Institutional Implications of Crisis at Fiat Auto," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 29(4), pages 771-795, December.
  6. Filipe Lage de Sousa, 2010. "Regional manufacturing wages: dancing to the tune of trade shocks," LSE Research Online Documents on Economics 33500, London School of Economics and Political Science, LSE Library.
  7. José Ricardo Ramalho, 2002. "VW's modular system and workers' organization in Resende, Brazil," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(4), pages 756-766, December.
  8. Hector Rocha & Rolf Sternberg, 2005. "Entrepreneurship: The Role of Clusters Theoretical Perspectives and Empirical Evidence from Germany," Small Business Economics, Springer, vol. 24(3), pages 267-292, 02.
  9. Yveline Lecler, 2002. "The cluster role in the development of the Thai car industry," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(4), pages 799-814, December.

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