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Trade liberalization and industrial concentration: Evidence from Brazil

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  • Ferreira, Pedro Cavalcanti Gomes
  • Facchini, Giovanni

Abstract

This paper applies an endogenous lobby formation model to explain the extent of trade protection granted to Brazilian manufacturing industries during the 1988-1994 trade liberalization episode. Using a panel data set covering this period, we find that even in an environment in which a major regime shift has been introduced,more concentrated sectors have been able to obtain policy advantages, that lead to a reduction in international competition. The importance of industry structure appears to be substantial: In our baseline speci.cation, an increase in concentration by 20% leads to an increase in protection by 5%-7%.

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Paper provided by FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil) in its series Economics Working Papers (Ensaios Economicos da EPGE) with number 531.

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Date of creation: 01 Mar 2004
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Handle: RePEc:fgv:epgewp:531

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Citations

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Cited by:
  1. Baybars Karacaovali, 2011. "Productivity Matters For Trade Policy: Theory And Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 33-62, 02.
  2. Jørn Rattsø & Torfinn Harding, 2009. "Industrial labor productivities and tariffs in South Africa: Identification based on multilateral liberalization reform," Working Paper Series 10309, Department of Economics, Norwegian University of Science and Technology.
  3. Flôres Junior, Renato Galvão, 2004. "On the use(fulness) of CGE modelling in trade negotiations and policy," Economics Working Papers (Ensaios Economicos da EPGE) 564, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).

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