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The Impact of International Trade Flows on the Growth of Brazilian States

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  • Marie Daumal

    ()
    (Université Paris 8 Vincennes-Saint-Denis, Université Paris-Dauphine, LEDa, UMR DIAL)

  • Selin Ozyurt

    ()
    (Université Paris-Dauphine)

Abstract

The aim of this paper is to explore the impact of Brazil’s trade openness on regional inequalities by estimating the effect of international trade flows on growth of Brazilian states, depending on their income level. For this purpose, we run dynamic growth regressions, using the system GMM estimator, on a panel data set including 26 Brazilian states for the 1989 - 2002 period. Growth rates of Brazilian states are regressed on control variables and on Brazilian states’ trade openness variables. All variables vary across both states and year. The results indicate that trade openness benefits more the Brazilian states with higher levels of per capita income, thereby tending to increase regional inequalities in Brazil. Besides, we find that trade openness advantages more the states with a good level of human capital as well as the industrialized states rather than the states whose main activity is agriculture. The problem that this study reveals is that international trade seems to provide additional advantages to already well developed Brazilian states while one of the priorities of the Brazilian federal government is to achieve a better territorial balance in Brazil. _________________________________ Ce travail a pour objectif d’estimer l’impact des flux de commerce international sur la croissance des Etats brésiliens. A l’aide de l’estimateur GMM, le taux de croissance des Etats brésiliens est régressé sur divers déterminants de la croissance et sur leur taux d’ouverture commerciale. La base de données en panel contient les 26 Etats brésiliens sur la période 1989 - 2002. Les estimations de l’équation de croissance montrent que les flux de commerce international des Etats favorisent davantage la croissance des Etats riches que celle des Etats les moins développés. Nous montrons également qu’il existe au Brésil une convergence conditionnelle. Les Etats pauvres ont un taux de croissance plus élevé que les Etats riches mais il semble que leurs états stationnaires soient très différents les uns des autres, ce qui nous amène à penser que les inégalités régionales resteront importantes dans l’avenir.

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Bibliographic Info

Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2010/01.

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Length: 27 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:dia:wpaper:dt201001

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Keywords: International trade; growth equation; GMM estimator; Brazilian states; Commerce international; équation de croissance; estimateur GMM; Etats brésiliens.;

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References

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  1. Rodríguez, Francisco & Rodrik, Dani, 1999. "Trade Policy and Economic Growth: A Sceptic's Guide to the Cross-National Evidence," CEPR Discussion Papers 2143, C.E.P.R. Discussion Papers.
  2. Bond, Stephen Roy & Hoeffler, Anke & Temple, Jonathan, 2001. "GMM Estimation of Empirical Growth Models," CEPR Discussion Papers 3048, C.E.P.R. Discussion Papers.
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  7. Luciano Nakabashi & Márcio A. Salvato, 2006. "Human Capital Quality in the Brazilian States," Working Papers 0037, Universidade Federal do Paraná, Department of Economics.
    • Luciano Nakabashi & Márcio A. Salvato, 2007. "Human Capital Quality in the Brazilian States," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 8(2), pages 211–222.
  8. Roberto Chang, & Linda Kaltani & Norman Loayza, 2006. "Openness Can be Good for Growth: The Role of Policy Complementarities," Working Papers Central Bank of Chile 373, Central Bank of Chile.
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  12. Ben-David, D., 2000. "Teach your Children Well: Planting the Seeds of Education and Harvesting the Benefits of Trade," Papers 2000-5, Tel Aviv.
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  14. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
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Cited by:
  1. Muhammad, Shahbaz, 2012. "Does Trade Openness Affect Long Run Growth? Cointegration, Causality and Forecast Error Variance Decomposition Tests for Pakistan," MPRA Paper 37391, University Library of Munich, Germany, revised 10 Mar 2012.

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