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Neighborhood and Efficiency in Manufacturing in Brazilian Regions: A Spatial Markov Chain Analysis

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Author Info

  • Daniela Schettini

    (Department of Economics, University of Sao Paulo, Brazil)

  • Carlos R. Azzoni

    (Department of Economics, University of Sao Paulo, Brazil)

  • Antonio Paez

    ()
    (School of Geography and Earth Science, McMaster University, Hamilton, Ontario, Canada)

Abstract

This paper analyzes the geography of regional competitiveness in manufacturing in Brazil. The authors estimate stochastic frontiers to calculate regional efficiency of representative firms in 137 regions in the period 2000-2006, in four sectors defined by technological intensity. The efficiency results are analyzed using Markov Spatial Transition Matrices to provide insights into the transition of regions between efficiency levels, considering their local spatial context. The results indicate that geography plays an important role in manufacturing competitiveness. In particular, regions with more competitive neighbors are more likely to improve their relative efficiency (pull effect) over time, and regions with less competitive neighbors are more likely to lose relative efficiency (drag effect). The authors find that the pull effect is stronger than the drag effect.

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Bibliographic Info

Article provided by in its journal International Regional Science Review.

Volume (Year): 34 (2011)
Issue (Month): 4 (October)
Pages: 397-418

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Handle: RePEc:sae:inrsre:v:34:y:2011:i:4:p:397-418

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Keywords: spatial markov Chains; neighborhood and efficiency; manufacturing; stochastic production frontier; production function;

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References

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  1. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  2. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
  3. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June.
  4. Ben Gardiner & Ron Martin & Tyler Peter, 2004. "Competitiveness, Productivity and Economic Growth across the European Regions," ERSA conference papers ersa04p333, European Regional Science Association.
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Cited by:
  1. Agovino, Massimiliano, 2013. "Do “good neighbors” enhance regional performances in including disabled people in the labour market? A spatial Markov chain approach," MPRA Paper 47038, University Library of Munich, Germany.

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