IDEAS home Printed from https://ideas.repec.org/p/cdp/texdis/td324.html
   My bibliography  Save this paper

Regional imbalances and market potential in Brazil

Author

Listed:
  • Pedro Vasconcelos Amaral

    (Cedeplar-UFMG)

  • Mauro Borges Lemos

    (Cedeplar-UFMG)

  • Rodrigo Ferreira Simões

    (Cedeplar-UFMG)

  • Flávia Chein Feres

    (Cedeplar-UFMG)

Abstract

Brazil presented in the last 30 years not only periods of economic growth but also crises and stagnation. The Brazilian regions’ performance (in face of the challenges and opportunities presented during this period) was not even at all, as we can see by the massive regional imbalances around the country. Various approaches have tried to understand this reality of economic activity spatial concentration. Among them, the emerging New Economic Geography (NEG). Could this theory comprehend and explain the regional unevenness on wages among Brazilian municipalities over the recent decades? Using 1980, 1991 and 2000 Brazilian Census data (at comparables municipalities areas), this paper aims to estimate the NEG wage equation, using panel data model with spatially correlated errors components. The results point to a strong relationship between market potential and wages, indicating that the NEG theoretical framework might be well fit to recent Brazilian municipalities’ reality.

Suggested Citation

  • Pedro Vasconcelos Amaral & Mauro Borges Lemos & Rodrigo Ferreira Simões & Flávia Chein Feres, 2007. "Regional imbalances and market potential in Brazil," Textos para Discussão Cedeplar-UFMG td324, Cedeplar, Universidade Federal de Minas Gerais.
    • Handle: RePEc:cdp:texdis:td324
    as

    Download full text from publisher

    File URL: https://www.cedeplar.ufmg.br/pesquisas/td/TD%20324.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bernard Fingleton, 2008. "A Generalized Method of Moments Estimator for a Spatial Panel Model with an Endogenous Spatial Lag and Spatial Moving Average Errors," Spatial Economic Analysis, Taylor & Francis Journals, vol. 3(1), pages 27-44.
    2. Bernard Fingleton, 2009. "A generalized method of moments estimator for a spatial model with moving average errors, with application to real estate prices," Studies in Empirical Economics, in: Giuseppe Arbia & Badi H. Baltagi (ed.), Spatial Econometrics, pages 35-57, Springer.
    3. Pines,David & Sadka,Efraim & Zilcha,Itzhak (ed.), 1998. "Topics in Public Economics," Cambridge Books, Cambridge University Press, number 9780521561365, January.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    5. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    6. Masahisa Fujita & Tomoya Mori, 2005. "Frontiers of the New Economic Geography," Papers in Regional Science, Wiley Blackwell, vol. 84(3), pages 377-405, August.
    7. Mion, Giordano, 2004. "Spatial externalities and empirical analysis: the case of Italy," Journal of Urban Economics, Elsevier, vol. 56(1), pages 97-118, July.
    8. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    9. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    10. Clélio Campolina Diniz, 1993. "Desenvolvimento poligonal no Brasil: nem desconcentração, nem contínua polarização," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 3(1), pages 35-64, September.
    11. Chein, Flávia & Lemos, Mauro Borges & Assunção, Juliano Junqueira, 2007. "Desenvolvimento Desigual: evidências para o Brasil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 61(3), March.
    12. Kelejian, Harry H & Prucha, Ingmar R, 1999. "A Generalized Moments Estimator for the Autoregressive Parameter in a Spatial Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 509-533, May.
    13. Songhua Lin, 2003. "International Trade, Location and Wage Inequality in China," WIDER Working Paper Series DP2003-61, World Institute for Development Economic Research (UNU-WIDER).
    14. Niebuhr, Annekatrin, 2004. "Market Access and Regional Disparities: New Economic Geography in Europe," Discussion Paper Series 26148, Hamburg Institute of International Economics.
    15. Magno Vamberto Batista da Silva & Raul da Mota Silveira Neto, 2005. "Determinantes Da Localização Industrial No Brasil E Geografia Econômica: Evidências Para O Período Pós-Real," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 116, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    16. Fingleton, Bernard, 2008. "Competing models of global dynamics: Evidence from panel models with spatially correlated error components," Economic Modelling, Elsevier, vol. 25(3), pages 542-558, May.
    17. Bowden,Roger J. & Turkington,Darrell A., 1990. "Instrumental Variables," Cambridge Books, Cambridge University Press, number 9780521385824, January.
    18. Steven Brakman & Harry Garretsen & Marc Schramm, 2000. "The Empirical Relevance of the New Economic Geography: Testing for a Spatial Wage Structure in Germany," CESifo Working Paper Series 395, CESifo.
    19. Kapoor, Mudit & Kelejian, Harry H. & Prucha, Ingmar R., 2007. "Panel data models with spatially correlated error components," Journal of Econometrics, Elsevier, vol. 140(1), pages 97-130, September.
    20. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Burhan Can Karahasan & Fırat Bilgel, 2020. "Market access and regional dispersion of human capital accumulation in Turkey," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 1073-1101, August.
    2. Ana Maria Bonomi Barufi, 2014. "Regional labor markets in Brazil: the role of skills and agglomeration economies," Working Papers, Department of Economics 2014_18, University of São Paulo (FEA-USP).
    3. Ana Maria Bonomi Barufi & Eduardo Amaral Haddad & Peter Nijkamp, 2016. "Industrial scope of agglomeration economies in Brazil," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(3), pages 707-755, May.
    4. Bernard FINGLETON & Silvia PALOMBI, 2013. "The Wage Curve Reconsidered: Is It Truly An 'Empirical Law Of Economics'?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 49-92.
    5. Stuart Donovan & Thomas de Graaff & Henri L. F. de Groot & Carl C. Koopmans, 2024. "Unraveling urban advantages—A meta‐analysis of agglomeration economies," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 168-200, February.
    6. Kevin A. Hassett & Aparna Mathur, 2015. "A spatial model of corporate tax incidence," Applied Economics, Taylor & Francis Journals, vol. 47(13), pages 1350-1365, March.
    7. Barufi, Ana Maria, 2014. "Agglomeration Economies in the Brazilian Formal Labor Market," TD NEREUS 3-2014, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2006. "Putting new economic geography to the test: Free-ness of trade and agglomeration in the EU regions," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 613-635, September.
    2. Gabriel M. Ahlfeldt & Arne Feddersen, 2010. "From periphery to core: economic adjustments to high speed rail," Working Papers 2010/38, Institut d'Economia de Barcelona (IEB).
    3. Michael Pfaffermayr & Peter Huber & Yvonne Wolfmayr, 2004. "Market Potential and Border Effects in Europe," WIFO Working Papers 235, WIFO.
    4. Chian-Yue Wang & Robert Haining, 2017. "Testing the new economic geography’s wage equation: a case study of Japan using a spatial panel model," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 417-440, May.
    5. Bernard FINGLETON & Silvia PALOMBI, 2013. "The Wage Curve Reconsidered: Is It Truly An 'Empirical Law Of Economics'?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 49-92.
    6. Peter Huber & Michael Pfaffermayr & Yvonne Wolfmayr, 2011. "Are There Border Effects in the EU Wage Function?," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 2, pages 23-41, June.
    7. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    8. Henry Overman & Patricia Rice & Anthony Venables, 2010. "Economic Linkages across Space," Regional Studies, Taylor & Francis Journals, vol. 44(1), pages 17-33.
    9. Reinhold Kosfeld & Hans-Friedrich Eckey, 2010. "Market access, regional price level and wage disparities: the German case," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 30(2), pages 105-128, September.
    10. Kim, Ho Yeon, 2012. "Shrinking population and the urban hierarchy," IDE Discussion Papers 360, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    11. Jesús López-Rodríguez & J. Andrés Faíña, 2000. "Human Capital Accumulation and Geography: Empirical Evidence in the European Union," Regional and Urban Modeling 283600060, EcoMod.
    12. Bosker, Maarten & Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2012. "Relaxing Hukou: Increased labor mobility and China’s economic geography," Journal of Urban Economics, Elsevier, vol. 72(2), pages 252-266.
    13. Bernard Fingleton & Manfred Fischer, 2010. "Neoclassical theory versus new economic geography: competing explanations of cross-regional variation in economic development," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(3), pages 467-491, June.
    14. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    15. Baltagi, Badi H. & Fingleton, Bernard & Pirotte, Alain, 2019. "A time-space dynamic panel data model with spatial moving average errors," Regional Science and Urban Economics, Elsevier, vol. 76(C), pages 13-31.
    16. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909, Elsevier.
    17. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    18. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    19. Moscone, Francesco & Tosetti, Elisa & Canepa, Alessandra, 2014. "Real estate market and financial stability in US metropolitan areas: A dynamic model with spatial effects," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 129-146.
    20. Niebuhr, Annekatrin, 2004. "Market Access and Regional Disparities: New Economic Geography in Europe," HWWA Discussion Papers 269, Hamburg Institute of International Economics (HWWA).

    More about this item

    Keywords

    New economic geography; market potential; Brazil;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdp:texdis:td324. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gustavo Britto (email available below). General contact details of provider: https://edirc.repec.org/data/pufmgbr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.